Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — HOME DEPARTMENT

The Secretary of State was asked—

Asylum Seekers

Dr. Brian Iddon: What progress he has made in arranging suitable accommodation and services for dispersed asylum seekers. [130322]

The Minister of State, Home Office (Mrs. Barbara Roche): To date, the national asylum support service has entered into contracts to provide accommodation and services for dispersed asylum seekers with a number of local authority, voluntary sector and private sector providers. As the House will be aware, from today, NASS takes responsibility for the support of all new asylum seekers who claim in London.

Dr. Iddon: In the past three months, 90 asylum seekers have been rehoused in 30 properties in Bolton—some of which were in poor condition. My main concern is that environmental health officers have reported to me that that has created houses in multiple occupation that do not conform to the statutory requirements. Will my hon. Friend tell us whether the agreement with the north-west consortium of local authorities is likely to be signed in the near future? Does she agree that it is important that the agreement include preferred provider status for those local authorities?

Mrs. Roche: My information is that no asylum seekers supported by the NASS scheme have been held in my hon. Friend's constituency. Those who are there will have been under the previous or the interim arrangements.
A specification about the standards for accommodation has been agreed with organisations such as the Refugee Council and has been placed in the Library. The conditions are stiff and we hold regular inspections. Of course, we will look into the facts mentioned by my hon. Friend.
I hope that a contract will be signed shortly. We certainly look to local authorities to be our key partners in this enterprise.

Mr. Ian Taylor: The Minister was right when she stressed, last week, that economic migrants

and asylum seekers can play a positive role in this country. I hope that she will give up eye-catching initiatives and concentrate instead on the real plight of people who desperately want to come to this country and who can make a positive contribution to our life in many respects. We are a generous nation; this is a human problem.

Mrs. Roche: I was going to start off by thanking the hon. Gentleman for his comments—indeed I do thank him; I agree with him about the nature of the British people. We are a very generous country indeed. However, he makes the classic mistake of confusing asylum with migration. Asylum is for people who seek refuge from political persecution. We have honourable commitments in that regard under the 1951 convention and we shall continue to meet them. There is, however, some debate to be held over migration—I should like to see that happen during the next few months.

Mr. Gordon Marsden: I am well aware of my hon. Friends' efforts to get the NASS system off to a flying start, because I have held discussions with her on the matter. Does she agree that there is concern about people who are currently settled inappropriately under the interim or the previous arrangements'? Will she do whatever she can to encourage colleagues in NASS to assume some of those responsibilities as soon as is practicable? Failing that, the well-meaning initiatives of NASS are likely to be compromised by inappropriate settlements under the previous conditions.

Mrs. Roche: We have held good and constructive discussions on this matter. We managed to ensure that the NASS roll-out took place more quickly than we thought possible. That was a success and I congratulate the officials who were involved.
As for the wider picture, we urge local authorities to ensure that, when they place people, they hold full consultations so that local communities are well prepared to deal with what is required.

Mr. David Lidington: I suppose that we can, at least, give some welcome to the extension of the NASS scheme to the London authorities, albeit four months later than the Government promised us. If everything in the garden is so lovely—as the Minister says it is—why do we constantly hear complaints from local authorities such as Blackpool, and from voluntary organisations such as the Refugee Council, to the effect that the dispersal programme is being carried out in a shambolic fashion? Many people are not given adequate accommodation and access to legal advice and interpreters, despite the Government's continual promises. Why is there a steady flow of people back from the areas of dispersal to London and the south-east, as the Evening Standard reports only today? Is that not the clearest evidence that the Government's policy is not working in the way they promised us?

Mrs. Roche: What is absolutely clear is that the programme that was inherited from the previous Conservative Government—whom the hon. Gentleman supported—was not well administered. The hon. Gentleman refers to a shambles. There was indeed a shambles; if he reads the report of the Audit Commission


on the matter, he will find that all the research was conducted on the old arrangements—those set up by the previous Tory Government. Even to call them arrangements is a misnomer; they were organised chaos, from which local authorities—Labour and Tory—are still suffering.

Sunday Dancing

Mr. John Grogan: What progress he has made on deregulating Sunday dancing.[130323]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): We are seeking to resolve an issue with a House of Lords Committee in order to make progress.

Mr. Grogan: Given that, this year, new year's eve falls on a Sunday and that Sunday dancing has long since been deregulated in Scotland, does my hon. Friend agree that it is a matter of frustration that the Deregulation Committee in another place, many of whose members' dancing days have probably long since gone, has declined to give an expeditious passage to this modest but necessary deregulation?

Mr. O'Brien: I agree with hon. Friend. The ban on Sunday dancing is antiquated and should have gone years ago. We certainly do not want it to interfere with people celebrating new year. The ban was introduced in the Sunday Observance Act 1780 by probably the worst Tory Prime Minister, Lord North. Our proposals will give freedom of choice to people as well as remove unnecessary regulation on business. The hospitality and leisure industry estimates that the changes could generate up to 3, 000 new jobs. I am saddened that Conservative Lords are preventing progress at the moment. I hope that they will change their minds, because this is another example of the forces of conservatism opposing deregulation for business and freedom of choice for ordinary people.

Mr. Desmond Swayne: Does the Minister not share my concern that it is the speed at which people might drive to dances on Sunday that is the principal concern? If we could be assured of a policy of zero tolerance in that respect, the proposition might be more acceptable.

Mr. O'Brien: I am afraid that, in my current state, I will not be driving or hobbling to dances—and I certainly will not be dancing.

Mr. Gordon Prentice: Is not the law on this issue a complete shambles? It does not just affect dancing on Sunday. Is my hon. Friend the Minister aware that the Barrowford agricultural show in Pendle next month will, for the first time in about 100 years, take place on a Sunday? It will use only part of the local park, because if it used the entire park it would run counter to the Public Health Acts Amendment Act 1890 and the organisers would not be able to run their show. The issue is not just

about Sunday dancing and what happens in another place, but about a whole raft of antiquated laws and anomalies that need to be addressed quickly.

Mr. O'Brien: We certainly want to make sure that we address a range of deregulation matters. It is regrettable that, at the moment, the Lords Deregulation Committee has proved somewhat obstructive on some issues, but we hope that it will change its mind. The archaic 18th century legislation prohibits discos and charity dances on Sundays. If such events were open to the public and run on a commercial basis, the position would be far better. All these Lords a' leaping could then begin to leap.

Press Office

Mr. James Gray: What the cost was to public funds of the recent expansion of his Department's Press Office. [130324]

The Secretary of State for the Home Department (Mr. Jack Straw): To date, approximately £82, 000 has been spent on recruitment advertising and an external consultant's report, which recommended that the press office be restructured and expanded by between eight and 10 press officers.
The external recruitment process is still under way and the new press officers have yet to take up their positions. This expansion has been caused primarily by increased external demands on the Home Office press office. Calls have risen from 100, 000 to 150, 000 in the past three years.
The estimated total cost of the new staff, once in place, will be up to £400, 000 per year, bringing total costs to £1.6 million per annum.

Mr. Gray: From 31 March 1997 to 31 March 2000 the number of police officers in the United Kingdom fell by 2, 740, but now we hear, with a straight face from the Home Secretary, that he intends to spend up to £1.5 million on increasing his press office. Is he not slightly embarrassed by this conclusive evidence that he thinks that spin doctoring is more important than anything else, and that he would rather have press officers than police officers?

Mr. Straw: That was a silly point. As the hon. Gentleman wants to intertwine the issue of police officers with the number of press officers, he knows very well that, for the first three years of this Administration, the police authorities had to follow budgets either set or proposed by the Conservative Government. The difference between us and the Opposition on police numbers is that the right hon. Member for Maidstone and The Weald (Miss Widdecombe) promised an additional 500, 000 officers—[Laughter]—and secured only a reduction in numbers whereas, on 27 January 1997, we proposed giving police authorities money for additional police officers, which will now happen.
As for the issue of press officers, the only spinning in which I am ever involved is a spinning class at the House of Commons gymnasium every Monday morning. Indeed, I was there this morning. The increase in the number of


press officers is entirely the result of the increased demand placed on the press office by journalists of all kinds and of the expansion in the number of media outlets.

Mr. Clive Soley: Does the Home Secretary agree that the importance of those people has been demonstrated over the weekend by the story in the News of the World? Is it not right that we need press officers to make it clear that releasing names in the way the News of the World has done puts children at risk? I am pleased to say that Opposition Front Benchers agree with that. Perhaps we ought to send a strong message through the press offices that the News of the World's action, whether well intentioned or otherwise, is profoundly dangerous.

Mr. Straw: The Minister of State, my right hon. Friend the Member for Brent, South (Mr. Boateng), made our position very clear, and I am glad to note that the right hon. Member for Maidstone and The Weald shares our concerns that, in these matters, the press should act above all on the advice of the police, who deal with the concerns of public safety.
Getting back to the issue of press officers, the simple truth is that the huge expansion in the number of media outlets and a considerable expansion in the work of the Home Office since 1997, especially in race relations, the constitution, family policy and the voluntary sector, has resulted in an increase in demands on the press office to which we are now responding.

Sir Michael Spicer: When the right hon. Gentleman sorts out the press office, will he get it to issue a cheap press release explaining the Home Office's plans for the future of the three dangerous, empty tower blocks on Marsham street for which his Department has responsibility?

Mr. Straw: We have already done that.

Closed Circuit Television

Mr. Colin Burgon: What assessment he has made of the impact of CCTV systems funded under the crime reduction programme. [130325]

The Minister of State, Home Office (Mr. Paul Boateng): Schemes funded under the first round of the initiative are now being implemented and it will be at least 12 months before the impact of CCTV in those areas can be fully evaluated. The Home Office will fund in-depth and independent evaluations of 15 schemes and less detailed evaluations of a further 100. The crime and disorder reduction partnerships will also evaluate local schemes.

Mr. Burgon: I thank the Minister for that reply. In my constituency, the Wetherby News has led a high profile campaign to install CCTV in the town centre. I very much support that campaign and have been in talks with Leeds city council to progress matters. Will the Minister look sympathetically at any well researched bid from Wetherby councillors and the business community that illustrates their willingness to give the scheme meaningful financial

support and which clearly shows how CCTV fits into the overall strategy of crime reduction in Wetherby town centre?

Mr. Boateng: I would be happy to do that. The good news about the second round announced on 31 March is that it will take the form of a rolling programme of bids, so with my hon. Friend's encouragement it will be possible for his local council to get in a well evaluated and targeted bid that is linked to local crime reduction targets. That is the key, as all the evidence so far suggests that such schemes make a substantial contribution to reducing crime in local areas.

Mr. John Bercow: How many CCTV schemes are there in the constituencies of Home Office Ministers, and what provisional assessment has been made of their efficacy?

Mr. Boateng: I have no idea about arrangements in my colleagues' constituencies. However, under the previous and present Administrations, my local borough of Brent was able to put in well funded CCTV schemes that commended themselves to Ministers and civil servants alike. I recommend that approach to the hon. Gentleman.

Local Elections

Mr. Peter L. Pike: If he will make a statement on his plans for the extension of different methods of voting in next year's local elections. [130326]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): Thirty-eight pilot schemes to test new voting arrangements took place in 32 local authority elections last May. Each authority is preparing an evaluation of the effectiveness of their pilot projects, but these are not due until the beginning of August. When we have seen the evaluations we will be able to decide whether any extension is justified.

Mr. Pike: Will my hon. Friend confirm that while we all want an increase in the number of people who are able to vote in local elections, we want also to ensure the integrity of the vote and make sure that people's votes are cast correctly? What will happen to the pilot schemes next year if the general election falls on the same date as the county council elections?

Mr. O'Brien: We certainly want to ensure the integrity of any pilot schemes. Of course, if there were a general election at the same time as local elections, the arrangements that operate during a parliamentary election would apply in both cases.

Mr. Dafydd Wigley: When considering new voting methods, will the Minister bear in mind the needs of disabled people, particularly those with sensory disabilities, to ensure that any new methods take their requirements into account? We must ensure in particular that we do not lessen the pressure on authorities to maintain conventional voting methods that are open to disabled people.

Mr. O'Brien: I entirely agree with the right hon. Gentleman that we want to ensure greater access not only


for those with physical disabilities but for those with learning disabilities. We have done a great deal to provide that access under recent legislation, and we have recently published guidance for electoral registration officers and returning officers to ensure that, wherever possible, there are obligations on them to provide access for disabled people to polling stations or to other forms of voting such as postal votes, so that they can play their full part in society.

Mr. Nigel Evans: I welcome some of the pilots that took place in May, particularly on earlier postal voting, but does the Minister accept that people fail to vote not simply because they cannot vote at weekends or over extended periods, but because they feel that the local government for which they are voting does not have the powers they want it to have? For example, when councillors vote against planning applications, their decisions are often referred to an independent inspector, who may overturn the wishes of local elected councillors. Will the Minister talk to his colleagues in the Department of the Environment, Transport and the Regions to find out what measures may be introduced to ensure that local democracy means what it says?

Mr. O'Brien: As I understand it, the legislation under which local government operates was introduced by the previous Government, whom the hon. Gentleman no doubt supported. We are ensuring that we give local authorities greater freedom and greater powers so that we restore local democracy after the damage done by the Conservatives over 18 years.

Mr. Phil Woolas: In his deliberations, will my hon. Friend look into the important problem of voter impersonation? He may be aware that in the Coldhurst ward in Oldham there is a police investigation into what appears to have been widespread abuse of the voting system by people apparently voting twice.

Mr. O'Brien: Personation is a serious offence, and I will ask the police for their view on that matter when they have completed their inquiries.

Metropolitan Police Authority

Mr. John Wilkinson: When he last met the Commissioner of Police of the Metropolis to discuss arrangements for transferring responsibility for policing in London to the Metropolitan police authority.[130328]

The Secretary of State for the Home Department(Mr. Jack Straw): I regularly meet the Metropolitan police Commissioner to discuss policing issues. The launch of the Metropolitan police authority was one of the issues discussed at our meeting on 22 June 2000.

Mr. Wilkinson: Did not the Home Secretary hand a poisoned chalice to the Metropolitan police authority on 3 July, inasmuch as during his tenure of office, he has presided over a diminution of police manpower of no fewer than 1,200 in the metropolitan area? Furthermore,

in the past year no fewer than 588 officers have left the service, while recorded crimes have risen by over 100,000.
Not only do the Metropolitan police feel "battered"—to quote incoming Commissioner Sir John Stevens—but the general public are getting a raw deal, with the precept going up, crime going up and police numbers going steadily down. Is it not lamentable that under the current Government police numbers are no fewer than 1,500 below the minimum number declared acceptable by the previous Commissioner, Sir Paul Condon?

Mr. Straw: The chalice is far from poisoned. The establishment of a democratic and representative Metropolitan police authority has been widely welcomed by all parties and is something that, in my view, should have been done many decades ago. What is lamentable is the fact that, year after year under the previous Administration, there were mounting reductions in the number of police officers in London—155 in 1995 and 400 in 1996, rising to 700 in 1997–98, under a budget set by the previous Administration—yet Conservative Members of Parliament did not protest about that serious reduction in police manpower in Greater London. It has taken changes to the financial arrangements for the Metropolitan police service that I have made, including a significant increase in the special allowance, to ensure that, at long last, numbers will stabilise and then start to rise. The one thing above all that made life so difficult for the Metropolitan police service was the abolition of the housing allowance under the Sheehy proposals, which the hon. Gentleman supported and we opposed; we are now repairing that damage.

Mr. Oliver Heald: Even if he would not describe it as handing over a poisoned chalice, surely the Home Secretary would agree that he has transferred the policing of London to the Metropolitan police authority in a pretty sorry state? How can he say that the drop in police numbers that occurred under the Conservatives is the problem when, during his years in office, the number has fallen by 1,581, at a time when crime is rising by 12.6 per cent., emergency calls are not answered and police stations are closing? Is he aware that Sir John Stevens has said that he needs 25,600 officers in London to police the capital properly, that numbers are currently lower than that and that even the mayor of London is now calling for urgent increases? Will the right hon. Gentleman tell us when numbers will return to the safe level of 25,600 that has been set by the Commissioner? Now, they are considerably lower than that, which represents an abdication of the Home Secretary's responsibilities.

Mr. Straw: As the hon. Gentleman knows, we are now putting money into the Metropolitan police service and other police services to ensure that numbers start to rise. In addition, already in payment is a £3,500 increase in the London allowance for Metropolitan police officers. What is absolutely certain, following last week's announcement by the shadow Chancellor, is that under the Conservatives the sums available for policing in London and the rest of the country would be significantly less than they are under the Labour Government.

Police Recruitment

Mr. Derek Twigg: Which police forces find it (a) most difficult and (b) easiest to recruit officers; and what mechanisms exist to attract potential recruits from the latter to the former forces. [130329]

Mr. Jim Cunningham: If he will make a statement about those police forces which are experiencing recruitment difficulties. [130333]

The Secretary of State for the Home Department(Mr. Jack Straw): The Metropolitan police service and the City of London police are finding it the most difficult to recruit police officers; a few other forces, including Essex, Hampshire, Hertfordshire and Thames Valley also report recruiting difficulties, but most forces, including Cheshire, West Midlands and Lancashire, are having no difficulty—indeed, the Sussex force in the south of England has reported considerable success in attracting recruits.
As I have just told the House, to alleviate the recruitment problems in London I announced that, from 1 July, there would be a £3,327 increase in the London allowance for those Metropolitan or City of London officers who joined on or after 1 September 1994. Later this summer, the Home Office will launch a national police recruitment campaign, and I am confident that the campaign will help those forces that are experiencing recruitment difficulties. Potential recruits responding to the campaign will be directed toward forces that are recruiting, with an emphasis on those in greatest need.

Mr. Twigg: I thank my right hon. Friend for that answer. The extra resources for more policemen and women are clearly much welcome. However, cannot more be done for areas such as mine in Cheshire, where there are more applications than positions, to give people incentives to go to forces such as those in the Metropolitan areas? Is there not a case for police forces doing more to retain officers and to stop the haemorrhaging in certain areas?

Mr. Straw: I hope very much that, following the very substantial increase in the London pay lead, which brings it to £6,000 a year above forces outside, many applicants who might previously have wished to join forces such as Cheshire's will be attracted to applying either to London forces or to those in the south-east.

Mr. Cunningham: Can my right hon. Friend say how the west midlands compares with other areas on recruitment? Secondly, what proportion of the 9,000 new officers proposed over the next three years will be allocated to the west midlands; more importantly, what will be Coventry's share?

Mr. Straw: My understanding is that recruitment in the west midlands is going well. I hope very much that it will be even more satisfactory following my announcements last week of significant increases in funding for the police service. I understand that total profile recruitment for 2000–01 for the west midlands is 555. Profile recruitment

to the end of June was 149, and that was being met. Of those, 51 are officers provided under the crimefighting fund.

Mr. Simon Hughes: The Home Secretary announced that last year's growth was just short of 3 per cent., and we saw over the year a drop across the country of 1,700 officers—not a recruitment figure—which accelerated in the last six months, with a loss of about 1,000 officers. Given his answers in the House last week, when does he expect net recruitment to produce a police service across England and Wales of the 1997 size? Does he expect in the coming year a net increase in officers in every force? Will he give a guarantee that, unlike last year, every force will receive a net real-terms increase in the money that it receives after pensions moneys have been taken out?

Mr. Straw: As I told the House last week in answer to the hon. Gentleman, we anticipate that numbers should return to the April 1997 level some time in 2002, and then rise, on the funding that we have already provided, to their highest ever. Without notice, I cannot give him the detailed information for which he asked, but I shall certainly be happy to write to him.

Miss Anne McIntosh: The Home Secretary gave the figures for recruitment of regular police officers. Are those for the recruitment of special constables broadly similar? Will he give an indication of which counties have the greatest difficulty with early retirement and the retention of police officers over a longer period?

Mr. Straw: The figures that I gave were for full-time police officers and not for special constables, who are of course unpaid. I cannot give the hon. Lady detailed information about variations between forces in retention and retirement rates, but I am happy to write to her about that. I can tell her, however, that there are significant variations between otherwise similar forces on retirement, retention and sickness rates. Those illustrate variations in the performance of management. That is why, with Her Majesty's inspectorate of constabulary, we are expecting forces greatly to improve their performance. In London, improvements in sickness management have put hundreds of officers back on the beat.

Mr. Hilary Benn: Does my right hon. Friend agree that one thing that police officers who are also community constables find so frustrating about the job is the extent to which they are taken off their community duties for other duties, as demand requires? To what extent does he expect the additional police officers whom he announced last week to change that practice? Does he intend to monitor the application of those additional officers to ensure that more community constables can do the job for which they are employed?

Mr. Straw: My hon. Friend is right. An Audit Commission report about two years ago showed that at any one time, only about 5 per cent. of the total strength of police services was available for general patrol. There has been a habit in many police services of giving higher priority to all other activities than to general patrol. I do not believe that that order of priorities is supported by the public. Yes, we will monitor the degree to which the


additional officers are used on general patrol community duties and in the front line in fighting crime. We are providing the services with a great deal of back-room assistance, including an expansion in the number of scenes of crime officers. I very much hope that hon. Members in all parts of the House will monitor, in their own police forces and police districts, the effectiveness of the additional funds that we are providing.

Miss Ann Widdecombe: Can the Home Secretary now answer the question that I put to him when he announced his public spending, and which he was then unable or unwilling to answer: after he has taken away from his projected £1.6 billion for police over the next three years the £500 million that he announced for the radio, the cost of salary rises and the cost of the pensions bill, how much will be left?

Mr. Straw: That was an extraordinary performance from the right hon. Lady. The simple fact is that police spending will rise by well over 6 per cent. in real terms next year and by almost 4 per cent. in real terms the following year. That contrasts extraordinarily well with the fact that when she was a Home Office Minister, police spending in real terms fell in one year by 0.9 per cent.

Miss Widdecombe: Clearly, the right hon. Gentleman cannot answer the question. May I ask him an easier one? Given that the number of police constables was rising when he took over, and given that the number has fallen consistently ever since, can he say whether he expects that by the time the Government leave office at the end of this Parliament, the number of police constables will be greater, smaller or the same as the number that he inherited?

Mr. Straw: Before the right hon. Lady devises her questions, it would be helpful if she could work out the difference between figures that are rising and figures that are falling. It was she who recommended the budget for 1997–98 to the House on 27 January 1997 and had the House approve it, and she who, during that debate, promised that there were funds available for police numbers to rise over the following three years by 5,000. In the year in which she laid down the budget, police numbers did not rise. They fell from 127,158 in March 1997 to 126,814 in March 1998. That was one more of the thousands of promises that the Conservatives failed to fulfil.

Miss Widdecombe: Clearly, the right hon. Gentleman does not know the answer to that question, either. May I throw him an even easier one? As a result of the spending plans announced last week, does he expect that the crime figures for 2000–01 will show a fall?

Mr. Straw: That depends on the criminals. Is the right hon. Lady saying, and will she go into the general election promising, that if people vote Conservative, crime will rise, year on year on year? [Interruption.] Oh, she is not saying that. She is inviting us to say it. What we are promising and what we are doing is putting in place the

biggest-ever investment in police and crime reduction that the country has ever seen. Already, our programme of crime reduction is driving burglary and car crime down.
If the right hon. Lady wants to swap figures, let me give them to her. Under her, when she was a Home Office Minister, there was an increase in police spending in real terms in 1995–96 of 0.49 per cent., in 1997–98 of 0.12 per cent. and in 1996–97 a decrease of 0.91 per cent. That compares with an increase this year of 1.47 per cent., an increase next year of 7.4 per cent. and an increase the following year of 3.5 per cent.
Will the right hon. Lady ever come to this Bench—[HON. MEMBERS: "Yes!"] I meant the Opposition Bench. Will she come to that Bench to tell us where and when Conservative budgets would make cuts following the single pledge of the shadow Chancellor? One pledge would definitely be fulfilled: police budgets would decline again in real terms under any Conservative Government.

Asylum Seekers

Helen Jones: What assessment he has made of the effect of the employment concession on the total number of applicants for asylum in the UK. [130330]

The Minister of State, Home Office(Mrs. Barbara Roche): We believe that the concession, which has operated since 1986, acts as a pull factor for applicants who wish to find work in this country but do not qualify for asylum. Several other European countries have no such concession to allow asylum seekers to work. We are keeping the need for the concession under review, especially in the light of the substantial progress we are making on speeding up asylum decisions.

Helen Jones: I thank my hon. Friend for that reply. Does she agree that, while the employment concession can operate in favour of traffickers by allowing people with unfounded claims to work—often to pay their debts—it is also true that there are many genuine refugees, who need help and support to find work? They have valuable skills that they can contribute to this country. Will she ensure in any review she undertakes that their interests will be protected and that their skills will not be lost to the nation?

Mrs. Roche: I agree with my hon. Friend. We must ensure that we have a firm response to those who, by trafficking and other means, try to undermine the honourable concept of asylum. My hon. Friend is right to mention refugee integration. Later in the year, I hope to announce a full programme for that and to illustrate the wonderful contribution that refugees have made to this country over the decades.
My hon. Friend is also right to highlight the contribution that those seeking to migrate legally to the United Kingdom may make. I am happy to say that tomorrow I shall announce a new innovator scheme to attract people with creative business ideas to the United Kingdom. The scheme will create a route of entry for


individuals who can bring economic benefits to our country, but do not qualify for entry as entrepreneurs under the existing rules.

Mr. Andrew Robathan: I am interested in what the Minister has said because it seems to fly in the face of what the Government are pleased to call joined-up government. My constituents are worried about congestion on our roads, the number of houses that will have to built on the green belt, the great pressure on hospitals—[Interruption.] I am glad that Labour Members find pressure on the hospitals interesting.

Madam Speaker: Order. Let us have the question.

Mr. Robathan: My constituents are worried about the great pressure on hospitals and schools and that, if they are over 45, they cannot get a job. I do not understand how letting more economic migrants into the country is likely to change my constituents' perspective. Will the Minister comment on that?

Mrs. Roche: Clearly the hon. Gentleman came into the Chamber without reading the question, which is about the work concession for asylum seekers. I respectfully remind him that the concession was introduced in 1986.

European Convention on Human Rights

Mr. Harry Barnes: What assessment he has made of the impact the incorporation of the European convention on human rights will have on political parties in the United Kingdom; and if he will make a statement. [130331]

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): We do not anticipate that political parties will be covered by the definition of public authorities for the purposes of the Human Rights Act 1998.

Mr. Barnes: Is the Minister aware that many United Kingdom citizens, who are correctly on electoral registers, can neither vote for nor join the major political party in this country—the Labour party? I am referring to Northern Ireland. Will not those rights, which the citizens of Northern Ireland lack, be affected, at least indirectly, by the human rights convention? Is not it a good idea for the Labour party to organise in Northern Ireland? That might begin to end some of the sectarian nature of politics in the Province.

Mr. O'Brien: We do not believe that the way in which a political party allocates its membership or decides to organise itself internationally will come under the Human Rights Act.

Mr. Geoffrey Clifton-Brown: Can the Minister tell us how the Political Parties, Elections and Referendums Bill will square with freedom of expression—the fundamental tenet of the European Commission of Human Rights—given that, under the Bill, the composition of a Parliament will determine the funding and, therefore, the Labour party could currently spend £9 million on a referendum on the euro, but the

Conservative party could spend only £5 million? How does that square with the fundamental tenet of freedom of expression and fundamental democracy?

Mr. O'Brien: Legislation has shown that it is possible to regulate the financial operation of elections and that that does not contravene the European convention on human rights. The legislation is clear on such matters, and it also deals with the transparency of the financial affairs of political parties. We want to ensure that we comply with the European convention on human rights—indeed, we will be obliged to do so—and nothing in the legislation to which the hon. Gentleman refers will cause us to breach it.

Hilda Murrell

Mr. Tam Dalyell: Pursuant to his answer of 6 July 2000 to my hon. Friend the Member for Shrewsbury and Atcham (Mr. Marsden), Official Report, column 299W, on the death of Hilda Murrell, when he expects the investigations by the Forensic Science Service into the remaining forensic evidence in the Hilda Murrell case to be complete. [130332]

The Minister of State, Home Office (Mr. Paul Boateng): The progress of the investigations by the Forensic Science Service into the remaining forensic evidence in the Hilda Murrell case is a matter for the Forensic Science Service and, of course, the West Mercia constabulary to whom it will report its findings. I understand that the West Mercia constabulary would be happy to brief my hon. Friend on the progress of the investigation.

Mr. Dalyell: I would like to meet them.

Mr. Boateng: I will ensure that such a meeting takes place.

Madam Speaker: That is the sort of exchange I like.

Police Numbers

Mr. Owen Paterson: If he will make a statement on his projections for police numbers on 1 March (a) 2001, (b) 2002, (c) 2003 and (d) 2004. [130334]

The Minister of State, Home Office (Mr. Charles Clarke): My right hon. Friend the Home Secretary announced the outcome of Spending Review 2000 for Home Office services on 19 July. We are currently discussing the detailed implications of that announcement for police numbers with the police service. However, we expect that the number of police in March 2002 will exceed that which we inherited in March 1997. Moveover, we expect that, in March 2003, there will be the highest ever number of police officers in this country.

Mr. Paterson: I hope that the Minister is right because, in April 2000, the West Mercia force was 101 policemen down compared with April 1997. Who will train those policemen? West Mercia could recruit 200 officers, but it


could find only 40 places in the national training college. How does the Minister plan to increase capacity and when will those places be ready?

Mr. Clarke: Places are ready at the moment, but that is precisely the issue that we are discussing with the police service. I am slightly disappointed that the hon. Gentleman did not acknowledge the fact that, last Thursday, West Mercia received £1.158 million of the £15 million special funding for rural areas this year. That will help to increase police numbers.

Gillian Merron: My hon. Friend will be well aware that a further reduction in crime figures in Lincolnshire was announced this month. That, together with the considerable amount of extra Government resources, including extra moneys for rural police forces, will make a career in the police force ever more attractive. Will he consider developing a national strategy of work in schools so that young people consider a career in the police force as a more attractive option to provide a greater number of recruits?

Mr. Clarke: I am grateful to my hon. Friend for asking that question. I congratulate the Lincolnshire force on beginning to decrease the figures. That is, of course, the test. It is a tribute to all those involved. We shall launch a major national recruitment campaign later this year, including close work in schools of the kind that she recommends. I am glad that we agree with the approach that she suggests.

Mr. David Heath: I welcome the additional money for rural policing that will come to Somerset, but why was Somerset not included in the first place? How will the Minister monitor the adequacy of police resourcing for rural areas in police forces where there are also large urban areas?

Mr. Clarke: Monitoring is an important part of the statistics that we published a week ago. For example, there is a wide variation in crime against the person and so on in the districts in Avon and Somerset. I have the figures in front of me, and the hon. Gentleman has them at his disposal. The purpose of publishing figures at the crime reduction partnership level and at basic command unit level is to allow the kind of informed debate about performance—which is key—to which he refers. I hope that he will join us in trying to drive standards up in the way in which we seek to do.

Asylum Seekers

Ms Christine Russell: If he will make a statement on the number of applications for asylum from Chinese nationals in the past 12 months. [130335]

The Minister of State, Home Office (Mrs. Barbara Roche): Compared with the first quarter of 1999, applications from Chinese nationals have increased by 180 per cent. in the first quarter of this year.

Ms Russell: I thank my hon. Friend for that reply. Earlier this year, I visited China with a number of parliamentary colleagues and, at first hand, we heard from our embassy and consular staff of the amazing demand

for visas among young Chinese who want to improve their quality of life in the west. In the light of the appalling tragedy at Dover, does she agree that the civil penalty is fully justified and what discussions, if any, has she had with the Foreign and Commonwealth Office to try to get the Chinese authorities to tackle at source the evil trade of trafficking in impressionable young Chinese?

Mrs. Roche: We are having continuing discussions with our colleagues in the Foreign and Commonwealth Office, but, as the House will know, there are difficulties with the way in which the Chinese Government carry out redocumentation. My hon. Friend is absolutely right to refer to the civil penalty, which has been very successful, and the appalling tragedy at Dover. We must make a concerted effort to combat that evil trade and the civil penalty is playing its part: since implementation, the number of clandestine entrants arriving through south-east Kent has dropped by 23 per cent. Perhaps the right hon. Member for Maidstone and The Weald (Miss Widdecombe) will now drop her opposition to the civil penalty.

Mr. Michael Fabricant: The Minister will be aware that Britain is being promoted in China as a soft touch for asylum seekers, who receive free national health service treatment and social security, neither of which are available in France. What is she doing to have the Chinese authorities place under arrest those gangsters—those facilitators—in China who promote Britain as a destination? It is no good her talking to the Foreign and Commonwealth Office, which is patently doing nothing. When will her Department actively ensure that those facilitators in China are arrested?

Mrs. Roche: I would take the hon. Gentleman a lot more seriously if he agreed to support our civil penalty, which gets to the heart of the matter, and if he had not backed the right hon. Member for Maidstone and The Weald when she opposed our plans to withdraw social security benefits and introduce the national asylum support service. Once again, the Tories say one thing and do another.

Mr. Dale Campbell-Savours: Are Ministers seriously considering the benefits that would arise in the management of asylum seekers—whether from China or elsewhere; whether legal or illegal—were the United Kingdom to introduce a national identity card system? When one begins to analyse that approach, does not the message come through that such a system would greatly reassure the wider public?

Mrs. Roche: With the greatest respect to my hon. Friend, I do not think that that is the issue and we have no plans to introduce such a system. We must deal with those who seek to undermine the asylum system. Like many Members of the House, I owe a great deal to the stance taken by this country over the centuries on giving protection to refugees. I do not want anything to undermine that. Let us continue to provide sanctuary for those genuinely fleeing persecution.

Police Numbers

Ms Claire Ward: What representations he has received from the chief constable of Hertfordshire regarding police numbers in Hertfordshire and pay levels; and if he will make a statement. [130336]

The Minister of State, Home Office (Mr. Paul Boateng): The Hertfordshire constabulary had 1,767 officers on 31 March 2000, which is 43 more than it had 12 months earlier. I understand from the chief constable that he is projecting a further increase in police numbers this year and that the force target for the constabulary is 2,083 officers by 31 March 2001.
The chief constable has written to my right hon. Friend the Home Secretary about pay levels and the force's concern that the cost of living in Hertfordshire may have an adverse impact on the recruitment and retention of police officers.

Ms Ward: I thank my right hon. Friend for that reply. Is he aware that many Metropolitan police officers live in Hertfordshire and that as a result of the pay increase for Met police officers serving since 1994 there is now a differential between those officers and Hertfordshire officers of £6,000 a year? That is obviously encouraging many Hertfordshire officers to consider transferring to the Metropolitan police service. Will my right hon. Friend consider these issues and ensure that the police negotiating board deals with them with some urgency?

Mr. Boateng: I understand my hon. Friend's point. The police negotiating board is considering this and a range of other issues in relation to pay and conditions. I will ensure that my hon. Friend's concerns are drawn to its attention.

Mr. James Clappison: Given the pay differential between officers in Hertsmere and Hertfordshire and those in the Metropolitan area, will the Minister bear in mind the need for more police officers in Hertfordshire, especially in view of the growth of offences in violence? There has been an increase of 15 per cent. in such offences; and robberies have increased by 68 per cent. Hertfordshire is rapidly becoming a much less safe place in which to live. Will the right hon. Gentleman consider the reliance that he has placed on crime and disorder strategies, and especially the anti-social behaviour order, of which only one has been issued in Hertfordshire in response to all the violence that has taken place?

Mr. Boateng: The level of crime in Hertfordshire is still lower than the national average. Crime is at a lower level now than it was at the time of the general election. There are more serving police officers in Hertfordshire now than when the Conservative party had stewardship of these matters.

Ant-social Behaviour

Maria Eagle: What measures he is taking to encourage local partnerships between the

police and local authorities to make better use of orders available under the Crime and Disorder Act 1998 to prevent anti-social behaviour. [130337]

The Minister of State, Home Office(Mr. Charles Clarke): My right hon. Friend the Home Secretary recently published guidance in the form of a booklet entitled "Anti-Social Behaviour Orders: Guidance on drawing up Local ASBO Protocols", and a copy has been placed in the Library. That guidance is supported by training seminars and a variety of other means.

Maria Eagle: I welcome the fact that an increasing number of local authorities and local crime partnerships are making use of these orders. However, does my hon. Friend agree that it is not enough to have one or two orders per local authority area? They should be used where appropriate, and they should be seen by local crime reduction partnerships as a tool of early intervention and not as a last resort.

Mr. Clarke: I entirely agree with my hon. Friend. I take this opportunity to pay tribute to the work done by her city council, Liverpool, which I have visited. It has developed co-ordinated work between a variety of different agencies, which delivers in that way. There is a need to examine the range of orders that is available, and not only the anti-social behaviour order, in taking the action that my hon. Friend recommends.

Mr. Tim Collins: Does the Minister accept that one of the issues relating to the use of these orders is the overall level of police resources? In that context, will he tell us when he expects to be able to announce final conclusions on the overall element of rural sparsity funding in the police funding formula?

Mr. Clarke: I refer the hon. Gentleman to the announcement that we made last Thursday. I do not know whether the hon. Gentleman is aware of it. The announcement included about £650,000 for Cumbria, which I think will be well appreciated.

Asylum Seekers

Mr. Paul Clark: How many applicants for asylum have permission to work under the terms of the employment concession. [130338]

The Minister of State, Home Office (Mrs. Barbara Roche): We estimate that about 30,000 port asylum applicants at present have permission to work. In the case of in-country applicants, the available information indicates that about 14,000 applicants have been given permission to work in the past 12 months.

Mr. Clark: I thank my hon. Friend for that response. As a new Member, I was appalled by the time that was taken before decisions were made. Many families lived their lives in suspension, being unable to make any plans. I recognise that the time taken for initial decisions has been reduced, but what further steps are being taken to increase the speed of decisions?

Mrs. Roche: My hon. Friend highlights an important point. We are recruiting many more asylum case workers


to quicken decision making. We are working hard with the Lord Chancellor's Department to ensure that we are quickening the appeal process as well.

Closed Circuit Television

Mr. Phil Hope: What assessment his Department has made of the effectiveness of town centre CCTV systems in reducing crime and nuisance. [130342]

The Minister of State, Home Office (Mr. Charles Clarke): A number of research studies show that closed circuit television can have considerable success in reducing crime and anti-social behaviour in town centres and elsewhere. We have the largest scheme in the history of this country, and it is delivering substantial reductions in crime in many different ways.

Mr. Hope: I thank my hon. Friend for that reply. Without wishing to pre-empt further research, he may like

to know that, since CCTV cameras were introduced in Corby, 1,000 arrests have been directly attributable to them and crime has reduced by 32 per cent. Will he therefore consider sympathetically the application for extending CCTV in Corby to the town of Raunds in the rural part of my constituency and to the business watch schemes on industrial estates in Corby?

Mr. Clarke: I am grateful to my hon. Friend for that information. I am glad to say that it is typical of what has been happening. The guidelines that we published last February gave priority, in the CCTV bidding process, to three areas: first, rural areas, which my hon. Friend specifically mentioned; secondly, transport to help promote our integrated transport strategy; and, thirdly, out-of-town estates and business parks of the type that he mentioned. If he can get his local council and police to look at the Home Office website, they will find detail that will provide further opportunity for reducing crime in Corby.

G8 Summit

The Prime Minister (Mr. Tony Blair): With permission, Madam Speaker, I should like to make a statement about the G8 summit that I have just attended in Okinawa, Japan. Copies of the communiqués that we issued, and the accompanying Okinawa charter on the global information society, have been placed in the House Library. I give thanks to Prime Minister Mori, who hosted the occasion with great skill.
We discussed, first, the state of the world economy, which is now recovering well from the financial crises of 1997 and 1998. The reform of the international financial architecture that we set in hand when the UK chaired the G8 is firmly on track. Thirty countries have now signed up to International Monetary Fund assessment of their compliance with the new international codes and standards. The IMF's new contingent credit facility for countries in crisis is in place. We have established a financial stability forum to look at weaknesses in the global financial system, and taken action to involve the private sector more effectively in resolving crises.
We agreed at Okinawa that the next priority is to improve the existing mechanisms for crisis prevention by strengthening IMF surveillance, to reform the multilateral development banks to strengthen their focus on poverty, and to promote improved co-operation and co-ordination between the IMF and the World Bank. Although the worst of the financial crises is behind us, there is no room for complacency. Above all, there was clear recognition at the summit that we must try to launch a new World Trade Organisation trade round this year. Nothing is more important for the world economy than the early and successful conclusion of a new comprehensive trade round.
Secondly, prior to the summit, Prime Minister Mori of Japan chaired a discussion with representatives from the G7, the Organisation of African Unity, the Non-Aligned Movement and the Association of South-East Asian Nations, which underlined once again the immense problems faced by many of the world's least developed countries, particularly Africa—a debilitating, self-reinforcing cycle of conflict, poverty and weak governance.
The G8 agreed to make a renewed effort to implement the Cologne agreement on debt relief. Already, nine countries receive additional relief under the heavily indebted poor countries scheme, worth more than $15 billion. We agreed to quicken the process to get another 11 countries through to decision point by the end of this year—a further $20 billion of debt relief—and to reach out to the countries currently in conflict to see how they can be brought into the process.
We agreed to go further and faster on trade. The European Union is committed to giving the least developed countries duty-free, quota-free access to our markets for almost all products by 2005. We agreed to strengthen the effectiveness of our development assistance and, after years of wrangling, we finally secured a firm timetable for untying aid from January 2002 based on recent progress in the Organisation for Economic co-operation and Development.
We also agreed to support concrete quantitative targets for reducing deaths from AIDS, malaria and tuberculosis by 25 to 50 per cent. over the next decade and backed

those up with a strong commitment to provide increased resources. We are doubling our support for international efforts to develop new drugs and technologies for priority diseases.
The G8 also agreed to take forward the UK initiative on conflict diamonds. Britain and Russia will now chair an international conference to consider an international agreement on a certification scheme for rough diamonds and to tackle the link between the trade in illicit diamonds and the conflicts in Sierra Leone and other diamond-producing countries in Africa.
At present, it costs far more to access the internet in Uganda or Kenya than it does here or in the United States. We therefore agreed a series of measures set out in the charter to close the digital divide between the developed and the developing world, with huge potential for delivering educational and medical services cheaply or free across the internet.
That comprehensive programme of action reflects the real sense at the summit that, with our own economies in good shape, the time has come to devote more attention and give a higher priority to the plight of the world's poorest countries. That is not only a matter of solidarity and justice, but a hard-headed economic investment in the markets of the future.
Third on the agenda was the enormous problem of drugs and organised crime. With the global market for drugs now estimated at up to $500 billion a year, we need to see the international cartels for what they are: major international businesses with the same need for banking facilities, working capital and investment funds as any other business. The G8 therefore agreed to a further clampdown on money laundering, tax evasion and banking secrecy. That will be underpinned by the eight standards developed by G7 Finance Ministers in a new report that we published, setting out the measures that financial centres will need to comply with to avoid sanctions in the future.
Fourthly, we discussed the issues raised by genetically modified foods and crops. Obviously, there are still differences of view within the G8 on the risks associated with the new GM technologies, but we all agreed on the need to work harder to establish a clearer scientific consensus and to base policy and trade decisions on science.
Fifthly, on the environment, we agreed to tackle illegal logging and to encourage renewable energy in developing countries, where 2 billion people still have no electricity, and we pledged to work harder on the early entry into force of the Kyoto protocol on climate change.
In addition to the formal business of the summit, I had bilateral meetings with the other G8 leaders. My meeting with President Putin was especially valuable. I also had useful discussions with President Clinton on the middle east, the Balkans and Africa.
People will, of course, always find plenty to criticise when international leaders gather, but it is worth remembering a few points. It was the decisions made following the Birmingham summit two years ago that led to a new global financial architecture that has brought greater stability to the world economy. That is good for jobs and good for living standards. It was at Cologne last year that we made a substantial breakthrough on debt and contributed substantially to ending the conflict in Kosovo.
As a result of the decisions made this year at the G8 summit, over time fewer children will die of killer diseases such as AIDS, tuberculosis and malaria; more children will be lifted out of poverty; more children will get access to basic education; more people in the developing world will get access to computers and electricity; and the measures agreed on crime and drugs will make a real difference in a fight that can be won only at the international level.
Britain played a leading role both in shaping the agenda and in the main outcomes of the summit. Both on the world stage and in Europe, the Government are standing up for Britain and standing up for what is right.

Mr. William Hague: We welcome much of the summit communiquéincluding the commitment to maximise the benefits of information technology in developing countries; the recognition of the importance of universal primary education; the plan to combat disease such as AIDS, malaria and TB; the renewed effort to combat international crime and drug trafficking; and the measures to prevent conflict, including those to stop the illicit trade in diamonds. We especially welcome the recognition by the G8 of the need to provide improved access for developing countries to the markets of the developed world, and the firm commitment to a new round of World Trade Organisation trade negotiations, if possible this year.
Free trade is the greatest engine of prosperity and progress that there has ever been in developing and developed countries alike. The vacuum left by the failure of Seattle will be filled one way or another. Is it not vital that it be filled by renewed momentum towards free trade? Is there not an overwhelming necessity for the UK Government to renew the commitment of the previous Government to the completion of tariff-free global free trade by 2020 to help to provide that momentum?
I agree with the Prime Minister that it is right for the richer countries to focus on what can be done to help the poorer countries, and, in particular, to free them from crippling debt repayments. The House will welcome the progress made by the United Kingdom in writing off bilateral debt. As has been made clear, some of the delays in debt relief result from developing countries being involved in military conflict, but the many campaigners who have worked tirelessly on the issue have found the lack of progress at the summit deeply disappointing.
The firm commitment to debt relief, which both sides of the House welcomed after the Cologne summit last year, has not yet been matched by firm action. Is the Prime Minister concerned that Jubilee 2000 labelled Okinawa "the squandered summit" and said that
the world's leaders have blown it?
Is he concerned that a Tear Fund spokesman referred to statements on debt relief as
potentially the most lethal triumph of spin over substance?
The Prime Minister's statement did not refer to missile defence, but newspaper reports suggest that he discussed it with President Putin in connection with North Korea. Has the right hon. Gentleman yet resolved the Government's position on that issue? The Minister of State, Foreign and Commonwealth Office, the hon.

Member for Neath (Mr. Hain), labels the national missile defence system untested and vulnerable, while the Ministry of Defence has let it be known that it supports it.
Are the reports correct in suggesting that the Prime Minister hinted at unease over the project in discussions with President Putin? Should not the Government be making the case in Europe for working closely with the United States on that issue? Is it not time to make it clear to the United States that Britain would respond positively to any proposal for the upgrade by the United States of Menwith Hill and Fylingdales as part of a United States-NATO ballistic missile defence, should that be necessary?
Will the Prime Minister confirm reports this morning that he took a relaxed stance on the issue of genetically modified foods, this time siding with the United States? How does he square that with his much-vaunted article in The Independent four months ago, in which he emphasised his cautious approach? He said:
compare that with the position in the United States.
He said then that he was
leading the way in Europe
on GM labelling. Does his visible support for the American line on GM crops mean that he has pre-judged the outcome of the British GM crop trials years before they have been completed? Will he ratify the biosafety protocol without delay and insist that the Americans do the same?
Bearing in mind the failure to agree concrete progress on debt relief, will the Prime Minister comment on reports that the cost of the summit was half a billion pounds, a figure that for everyone is hard to believe? Did the items of expenditure include the construction of a replica of President Clinton's Arkansas home? While recognising that such decisions are for the Japanese Government to make and to defend—[Interruption.] Yes, of course they are. Does the Prime Minister acknowledge the widespread unease that such a sum, or anything like such a sum, should have been spent, when it could have been used to fund the combined debt repayment of up to 17 developing countries for a year—or even another millennium dome?

The Prime Minister: That is what passes for the right hon. Gentleman's statesmanship, I think.
On the costs of the summit, the right hon. Gentleman is right in saying that that is a matter for the Japanese Government. I would simply point out however, in fairness to them, that they also made a statement at the time of the summit that they intend to offer some $18 billion worth of aid to developing countries. We should give them credit for that.
As for the GM foods position, I do not know what the right hon. Gentleman means by that. I simply restated the position that I have stated throughout. It is not a question of backing the stance of the United States—we have a very cautious approach. Despite the position that he now takes on GM foods, I remind him that we have not licensed a single additional GM food in this country. It is this Government who have acted on labelling: the Government of whom he was a member refused to act on labelling.
What we have said—and where I strongly agree with what President Clinton said yesterday—is that it is important that we take decisions on the basis of science and evidence. That is what is important and I hold to that entirely.
On the point about national missile defence, we have made it clear throughout that we understand exactly why the United States is concerned about the possibility of rogue nuclear states. We are trying to ensure that the fear that the United States has—perfectly legitimately and justifiably—is taken account of in a way that does not put at risk the substantial progress that has been made on nuclear disarmament over the past few years. It is vital, therefore, for us to continue a dialogue on what will be one of the most important issues that we shall have to face over the next few years.
I entirely agree that it is very important for us to push ahead with the WTO round. I think that Seattle was a serious failure. We must recognise that the single most important thing for many of the poorest countries in the world—as important, indeed, as many of the things that we are discussing in relation to debt—is to gain access to the richer countries markets. It cannot be justified that wealthy countries keep out the goods of poorer countries, when such access is the very best way in which those countries can have a secure future without having to depend on aid and development assistance from the wealthier countries. I cannot say that we made as much progress on that as I would wish, but the position of the United Kingdom Government, at any rate, is very clear.
As for debt relief, the money is there—that is, the $100 billion target that was set at Cologne. What we need to do is get the countries through the decision point process. Nine have already gone through, and a further 11 should be through by the end of the year. We recommitted ourselves to that at Okinawa. However, we must also deal with the countries that are currently in conflict and cannot get through the decision point process for that reason. There is a clear need for us to renew our efforts, which is why we have agreed to send delegations from countries such as ours to countries that are in conflict to tell them, "If you want to take advantage of debt relief, you must resolve some of the basic issues of conflict; otherwise, the money will simply be wasted."
The UK has a very good record of writing off debt and of debt relief initiatives. I should point out, however, that when we came to office not one country had received the debt relief. Those countries are now receiving it, very much as a result of the work done by my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for International Development. I agree that we must go much further. We are very much in the forward advance, but we are having to act after several years during which not a great deal happened.

Mr. Charles Kennedy: As I think all hon. Members on both sides of the House recognise, a welcome feature of the summit—however frustrating the rate of progress may be—is the developing recognition among wealthier nations that collectively we must do more for the poorer nations.
Let me ask the Prime Minister a couple of specific questions arising from his statement. One concerns his discussions with President Putin, which he described in his statement as "especially valuable". That is an especially interesting statement; I think we would all like to know why the discussions were so valuable. For instance, did the Prime Minister have—and did he take—the opportunity in those bilateral discussions to tackle Mr. Putin on the continuing problems and oppression that afflict Chechnya in particular?
My second question concerns the report, not referred to in the statement—it may be accurate, or it may be inaccurate—that the Prime Minister was at pains to reassure his Japanese hosts that he intended, in a future Parliament, to move as quickly as possible towards a referendum on the issue of a single European currency and to take a positive stance on such a referendum. Is that report accurate? If so, what comments did the Prime Minister's opposite numbers make?
Finally, given the emphasis placed by the summit on the need to help the developing and the underdeveloped world, and given the fact that some of us were either at school or at university when the Brandt report, for example, was under way, does the Prime Minister agree that here we are, an entire global political generation later, yet we have still made pathetically inadequate progress in the attitude of the developed world to the underdeveloped world?
The Prime Minister spoke of writing off $100 billion of debt—which was agreed at last year's Cologne summit—but only $15 billion of that debt has been cancelled. Given what he just said in response to the Leader of the official Opposition about the other countries involved, does he think that that remains a realistic target? If it is, what is the time scale for achieving it?
Does the Prime Minister agree that more work needs to be done to ensure that the heavily indebted poor countries do not have to meet such stringent economic criteria to qualify initially for eligibility for debt relief? Many hon. Members on both sides of the House have signed up to that cause with Jubilee 2000. The more that the Government can do on behalf of everyone in this country to give an impetus to achieving that goal internationally, the better.

The Prime Minister: On the issue of my bilateral talks with President Putin, we discussed the Russian economy and issues such as North Korea. We did indeed, however, also discuss Chechnya, and we made clear our concerns about human rights there. In turn, President Putin made very clear his commitment to finding a political solution. As for the euro, the position that I set out to the Japanese Prime Minister is precisely the position that I always set out. I really cannot help how that position is interpreted, although it seems to be interpreted in different ways depending on which day of the week it is. Perhaps what the Japanese emphasised to me in return was more important—that for Japanese inward investors, the important thing is that a decision on the euro is taken on economic grounds. In other words, the question is whether the decision is taken on the basis of what is right for the British economy. Of course, the position that we have set out allows us to do just that.
The Japanese are not saying that we should join the euro tomorrow. They are saying that, when the decision is taken, as investors in our economy they want to know that we will have the interests of the British economy—British jobs and investment—as our highest priority.
As for debt and debt relief, it is important that we do not put over-stringent hurdles in the way of the heavily indebted poor countries. However, it is not only a matter of economic hurdles; it is also important that we have systems of governance in those countries that make it clear that any money that is put in will go to those who really need it. That is not an unreasonable precondition. The right hon. Gentleman mentioned the $100 billion


Cologne target. However, only £50 billion of that is the HIPC initiative, with the rest being commercial debt and so on. I shall break down that $50 billion. Currently, with the nine countries that have gone through the process, there has been $15 billion of debt relief. If the 11 other countries get through the process by the end of the year, $35 billion of the $50 billion will be used for relief. That is very much approximating what we said at Cologne we would do. The other $15 billion is really to do with the countries that are in conflict.
Therefore, although I understand the frustration of all the campaigners on the issue and support very much the work of organisations such as Jubilee 2000—as the right hon. Gentleman knows, we have been at the forefront on these issues for the past couple of years—we have to make it clear that in some countries there are problems which prevent us from getting that money through.
I should like to take this opportunity to set out what the United Kingdom has done. We are increasing our aid budget by 20 per cent. in real terms in the next three years, with our aid: gross domestic product ratio rising to 0.33 per cent. We have already written off almost £250 million of debt, and we have made a commitment to write off a total of £1.7 billion of debt to the HIPC countries. We have pledged a bilateral contribution of $375 million for the HIPC trust fund, which is another important part of the process. We have announced a doubling of the amount that we are prepared to make available to improve access to drugs and medicines in developing countries. We have also led the way in tackling the problem of conflict, and particularly of conflict diamonds. We are also establishing with other countries a new taskforce on renewable energy, to help to bring clean electricity to 2 billion people who are currently without it.
If we add up all those sums, with the additional money that we are providing to fight AIDS, malaria and tuberculosis in Africa, it becomes clear that we have made more progress on the issue in the past three years than the United Kingdom has made for many decades. I think that we can be proud of that achievement.

Mr. Tam Dalyell: It was welcome that in his opening statement my right hon. Friend referred to tackling illegal logging. However, will he say what concrete measures will be taken to deal with this very difficult issue? Will the summit's hosts do anything about their position as recipients of many of the destroyed rain forests of Indonesia? Will Britain put its house in order in relation to the Amazonian rain forests?

The Prime Minister: That is a perfectly fair point. The most that I would say about the measures taken at the summit is that we have started a process. The matter was not even an issue at last year's summit, but it is now. All the countries involved in the summit are obliged to report back on what they are going to do to try to curb illegal logging.
That is a desperately important issue because at present we are despoiling vast amounts of the world's environment. There have already been serious consequences, and there will be more unless we take action. I do not pretend that we have done more than begin a process, but, partly as a result

of UK initiatives, we have at least got the issue on to the agenda. The obligation on individual countries to report back about what they are doing means that we have a better chance of at least getting the process properly under way.

Mr. Crispin Blunt: As the Prime Minister has shared with the world his appreciation of President Clinton's qualities, will he share with the House his appreciation of the contribution at the summit of President Putin?

The Prime Minister: Yes, I would be pleased to do that. I thought that President Putin made an outstanding contribution, not only in his description of the reforms in the Russian economy, which are immensely important for us, but in his description of the talks that he has held recently in North Korea, China and elsewhere. Overall, he was extremely impressive at the summit.
One of the most important elements of summits such as the one that has just been held is the opportunity to build relationships, trust and confidence between leaders. That can be vital. As happened in Kosovo, countries' interests can be in conflict, and the ability to speak openly and frankly to people is a very important part of getting such a conflict sorted out.

Ms Joan Walley: May I thank my right hon. Friend for his continuing efforts on debt relief, which will be welcomed by my constituents? However, with a new round of world trade talks about to begin, a new financial architecture is needed. What are my right hon. Friend's proposals for putting environmental issues at the very heart of the new trade agenda?

The Prime Minister: I shall deal first with the process of debt relief. Nine countries have now gone through the process. In Bolivia and Uganda, projects are under way and spending has been put in hand on schools, hospitals, infrastructure and jobs. The help for people in those countries is already visible as a result of the cancellation of debt. That shows how important it is to get the other countries through the process.
The WTO round will include environmental issues, but it is important that we ensure that questions to do with the environment and labour standards do not become a covert way of keeping out developing countries' goods. Therefore, I think that we must take account of the concerns that my hon. Friend raises, but we must do so in a way that is sensitive to the worry of developing countries that such concerns are merely back-door forms of protection.
I can tell my hon. Friend that there needs to be a big push to start the WTO round again. Whether or not that happens by the end of the year, the European Union has set a good example by stating that it will open up market access for the majority of its goods to the developing countries by 2005, and I urge other countries to take a similar lead.

Sir Peter Tapsell: Further to one of the questions asked by the leader of the Liberal Democrat party, the right hon. Member for Ross, Skye and Inverness, West (Mr. Kennedy), will the Prime Minister explain what he really meant when he said to the Japanese Prime Minister that a British decision on the


euro would not be taken on political grounds? Does he think that the biggest constitutional upheaval in this country since the revolution of 1688 could be a non-political event?

The Prime Minister: Let me explain to the hon. Gentleman again, because I am often asked that question, or a similar one, by Conservative Members: I am not saying that political and constitutional issues are not involved—of course they are. However, in relation to the Government's position, we have resolved those issues. We believe that the essential issue, therefore, is whether the euro is in the national economic interest. Let me point out to the hon. Gentleman—[Interruption.] I wish that hon. Members would listen. I have said that of course there are important political and constitutional questions, but the issue is whether there is a constitutional barrier to joining. The right hon. Member for Richmond, Yorks (Mr. Hague) would say that there was, and so would many other Conservative Members. If that is the case, his policy of ruling out joining for five years only is absurd. If there is a constitutional barrier, then rule it out for good. It is the Conservatives who need to resolve this constitutional question rather more than us.

Mr. Harry Cohen: While I had my doubts about the leisure shirt in which my right hon. Friend the Prime Minister was photographed, I was pleased, overall, with the outcome of the summit. Will he give more detail about what was proposed for tackling the AIDS epidemic sweeping Africa? Are there practical proposals to enhance public health provision, have cheaper drug costs, enhance the village hospitals in Africa and, equally importantly, get African leaders on side so that they do not say that it is all just about poverty?

The Prime Minister: My hon. Friend makes a series of justified points. The target has been set for the reduction of AIDS. It is important, however, that that is backed up by concrete measures. We, for example, are increasing the amount of support that we are giving to AIDS programmes in Africa. What my hon. Friend refers to in respect of education and local hospitals is vital. I also agree with him that it is important to have a serious and open discussion on AIDS so that the measures that we are taking will be effective. At the Durban conference a short time ago, representatives from all over the world discussed the issue.
The poverty in which people live makes it more likely that they will get the AIDS virus. That is absolutely true. What is also undeniably true is that unless we take preventive and educational measures, we have little chance of dealing with this issue properly. I hope very much that having set a specific target, and put in place the process to follow it up, we will be able to take the action necessary.

Mr. John Redwood: Will the Prime Minister tell us how many children in the poorest countries of Africa could have been educated in a primary school for a year with £450 million? Would that not have been a better use of most of the money spent on the summit? It would, after all, still have left £50 million to spend on a good few bottles of a very good wine so that delegates could get to know each other.

The Prime Minister: I have already explained the position on the cost of the summit. To ignore the

additional effort that has been put into debt relief in this country and elsewhere, and to ignore the £18 billion to which the Japanese have committed themselves, is rather silly. Least credible of all is the Conservative party posturing as the friend of the developing world.

Mr. Steve McCabe: Is it not wonderful to know that Jubilee 2000 is so capturing the public imagination that it is winning new friends all over the place?
When the Government set targets in domestic politics, there are usually incentives or penalties to encourage Departments or agencies to achieve them. What steps will the world leaders take to make sure that their intentions are translated into action?

The Prime Minister: There are a variety of things that we can do, although it is obviously not the same as in domestic government. For example, on money laundering and the fight against organised crime and drugs, if we proceed on the current basis, the eight new measures that have been agreed by Finance Ministers will be implemented by each of the countries involved. There will then be a report back throughout the course of the next year on how that process is proceeding. The result of that will be substantial changes to the laws of various countries. That is an example of what we can do.
In respect of the targets on AIDS, malaria and tuberculosis in Africa, again there is a process in place. In a sense, the best thing is for us to be called to account for that. I think that, partly because of the Cologne process on debt, there is an obligation upon us to go further on debt. Even though people want us to go far faster and further, if we had not had that Cologne summit I do not think we would have even made the progress that has been achieved so far. Under a domestic Government, the matter is different, but there are none the less political incentives built into the process.

Mr. William Cash: Does the Prime Minister accept that there are Conservative Members who have taken a great interest in third-world debt? Indeed, I have done so since as long ago as 1989. I am also chairman of the all-party group on Jubilee 2000.
Which countries are holding back the process and why? Is there any truth in the suggestion, which I heard recently at a conference, that it is to do with the reforms demanded by the World Bank and the IMF? As it is absolutely essential that there is immediate relief for people who are living in degrading and impossibly poverty-stricken circumstances, will the right hon. Gentleman do what he can about evening out the conditionality imposed on the current debt relief proposals?

The Prime Minister: On the whole, most of the countries want the process to succeed. There are obstacles—for example, the attitude of some members of the US Congress has been a problem in getting the US to do what President Clinton wants it to do.
Some other countries are—let us say—slower than us on untying aid, which is also extremely important. Other countries are hesitant about opening up their markets to the goods of the least developed countries. However, we are making progress on all those issues.
I am happy to pay tribute to the work done by the hon. Gentleman and, indeed, individual Conservative Members on third-world debt, but I am afraid that I have to remind him that when his Government were in office for 18 years, they reduced substantially the proportion of national income going to overseas aid and assistance. This Government are raising that again. As a result, I am afraid, of decisions taken by the shadow Chancellor, the amount of money that we are now committed to putting into aid and assistance would, of course, be cut.

Mr. Ronnie Campbell: I hear what the Prime Minister says about AIDS and diseases in Africa. Can he give a Labour guarantee—although I do not like to use the word—that that money, or that programme, will start this very moment, this very year? I have been to Africa. I have seen the carnage and the millions of kids who are dying of AIDS and disease. Something needs to be done now—not years later, but now.

The Prime Minister: I can tell my hon. Friend that we are indeed—now—putting in the additional money to fight those killer diseases in Africa.

Mr. Nicholas Soames: In welcoming the right hon. Gentleman's frank talks with President Putin, may I ask whether he had a chance to raise with him the question of Russian organised crime and its serious effect on many countries in western Europe? Does the right hon. Gentleman agree that the Russians need to tackle that problem? It greatly damages the credibility of a country that we need as a strong and sensible country in the world community.

The Prime Minister: We did, of course, talk about the need to have political and economic reform in Russia. One of the problems that Russia has faced is the high level of organised crime, and I agree that it is important that it deals with that. It is a threat that crosses its borders into the rest of Europe. The single most important thing we can do is to support a process of economic and political reform in Russia that puts in place a proper tax code, a proper commercial system and a proper legal system that together allow the problems to be dealt with. Of course I agree that the problem is huge.

Mr. John McAllion: Fifteen billion dollars of debt relief to just nine poor countries represents an abject failure to deliver on the commitment made at Cologne of $100 billion to 40 countries this year. Given that the Prime Minister himself said that the G8 economies are in good shape, does he agree, in principle, that the priority is not closing the so-called global digital divide, but delivering on comprehensive debt relief—now? If the problem with that is conflict in the poor countries themselves, can he tell us what discussions took place at the G8 summit on how limits and controls might he placed on the arms industries—including the arms industries in the G8 countries, which, by and large, fuel those conflicts?

The Prime Minister: Let me explain again to my hon. Friend about the $100 billion. We are supposed to put three quarters of $50 billion through by the end of this year, so he

can work out the figures. We have put $15 billion through and if we get the next 11 countries through, it will be $35 billion out of the $50 billion. I am not saying that we do not want to go faster and further—we do. Indeed, we would have gone further, but to describe what we have done as an abject failure is unfair.
Debt relief is important, but I am completely convinced of one thing—unless all the problems are tackled together, debt relief on its own will not do the business and will not produce the goods in Africa. We need to deal with the problems of health, trade and untying aid. We also need to deal with the problems of information technology. The truth is that if some of these countries were given access to information technology, it would have a fantastic benefit for them. We should not simply say that such an aim is pie in the sky from the richer countries. Potentially, many countries are crying out for access to information technology and it is a scandal that it costs more to access the internet in Uganda than it does in Britain or the United States of America. That issue is important, too.
The reasons for conflict in such countries have far less to do with the international arms trade than, I am afraid, the attempt by certain factions in those countries to seize control of wealthy natural resources. The dispute in Sierra Leone has one very simple basis: it is to do with the diamond industry. The Revolutionary United Front in Sierra Leone got the conflict going again over the past few months because the United Nations threatened to take over the diamond industry. Therefore, we need to put in place a proper system that ensures that if diamonds come from an area of conflict, they are not sold on the international market. Dealing with basic questions of conflict prevention is immensely important.
I emphasise to my hon. Friend that I do not believe that debt relief, in itself, is enough. Another issue is the system of governance in those countries, and all the issues have to be dealt with to provide a solution to the problems.

Dr. Jenny Tonge: Does the Prime Minister realise what enormous targets the summit leaders have set themselves? They have set targets to reduce the number of cases of TB and malaria by 50 per cent. and the number of cases of AIDS by 25 per cent. in 10 years. Those targets are quite extraordinary. Does he realise that the summit leaders have already slipped on their targets for debt relief and that the World Bank's recent report, "Can Africa claim the 21st century?" has shown that many more people are living in poverty now than there were 40 years ago? Are not such targets just a lot of hot air?

The Prime Minister: No—that is unfair and wrong. If, in fact, we get the additional 11 countries through by the end of this year, we will have very nearly met the target that we set in Cologne last year. [Interruption.] If I could just get the hon. Lady to understand my argument, she will see that as a result of that, we will have achieved more debt relief in one year than we did in virtually a decade before. It is always possible to say, "You should have done more and you should have done this or that." I agree that we need to do more, but to say that we have done nothing is wrong.
On the targets for AIDS, malaria and TB, let us take Uganda as an example—it has virtually halved its rate of AIDS. It is possible to take action, but only on the basis of targets that are put in place to act as a spur to countries to ensure that they do their utmost.

Mr. Harry Barnes: I shall ask only for an investigation. When the G8 countries consider the weaknesses of the global financial system, will they examine currency speculation, which has an horrendous impact on third-world nations? One option is the Tobin tax, which is a tax on currency speculation that the G8 could use to handle the massive problem of poverty in the third world. No Government are in a better position than this Government to take a lead on the issue, given the position they have taken on debt.

The Prime Minister: I do not think that I can offer my hon. Friend much comfort on the issue of a tax on the financial system. Part of the work that has been done by the financial stability forum is to do with highly leveraged institutions, hedge funds and so on. However, my own view is that proper systems of transparency and proper accounting standards are the most important issues for the international financial system.
A crisis develops when a financial system is not properly transparent and does not work according to established accounting standards. Dealing with that is the single most important thing that we can do, together with helping some of the poorest countries in the world to put their financial houses in order, which does not always need to be done in the old way of imposing very stringent conditions that they cannot meet unless they cut spending on basic services. However, it does mean working with those countries to make it clear, for example, that people who invest in them are investing in a robust commercial and legal system, and that the money that they put in goes to those for whom it is meant, not into the pockets of leaders or their friends.
We have made a lot of progress in the global financial system. However, our single biggest task is to get more countries to sign up to the transparency and accounting standards that are at the heart of a decent global system.

Rev. Martin Smyth: We understand the Prime Minister's reticence about giving all the answers that some of us would like. We all congratulate him and those who have been doing positive work in debt relief and care, including an education programme in Nigeria, Kenya and Uganda which is largely led by a nurse from Northern Ireland and the Fellowship of Christian Students.
What steps does the Prime Minister think will be taken to quicken the approach of the 11 countries that could have been in the programme, as there seems to be a delay somewhere along the line, as was obvious from his statement? Does he agree that perhaps the most wealthy country in the world could do more? Allowing for the fact that individuals have done wonderful things, quite frankly there is something wrong when newspaper reports say that America will not be able to meet the Kyoto targets because of its own industrial needs.

The Prime Minister: The hon. Gentleman is right: a lot more could and should be done. To be fair to America, it is rarely President Clinton who blocks progress, but elements in Congress and the Senate.
There is a good chance that we can get the 11 countries through by the end of the year. We are working closely with those countries to get in order all the bits and pieces that need to be in order, so that the decision point can be reached. As I said, debt has been relieved in the first nine countries, and people going to Bolivia, Uganda and so on are already seeing the difference that that makes. Incidentally, the hon. Gentleman is quite right to pay tribute to the programme led by the nurse from Northern Ireland. It is one of the best programmes that we have, and she has done a fantastic job.

Spending Review (Defence)

The Secretary of State for Defence (Mr. Geoffrey Hoon): My right hon. Friend the Chancellor of the Exchequer announced substantial additional provision for defence in his statement to the House on 18 July, which marked the end of a long period of decline in the size of the defence budget, following the end of the cold war. For the first time in almost 15 years, the Ministry of Defence is committed to modest real-terms growth in each of the next three years.
The settlement provides substantial additional funding for defence in the current year. There will be an extra £200 million from the reserve to help meet pressures on the defence budget, and in particular to help address the main equipment lessons learned from the Kosovo campaign. For the next financial year, the Ministry's budget will increase by £427 million over the level previously planned, which means an increase of some 1.9 per cent. Overall, the settlement will provide £1,250 million of new money for defence, on top of an allowance for inflation.
This substantial injection of additional cash ensures that we will have the amount needed to deliver the major programme of modernisation set out in the strategic defence review, to invest in the new equipment required to ensure that our armed forces build on their enviable record of professionalism and success, and to improve their living and working conditions.
The settlement sends an important signal about the Government's intention to sustain the capabilities of the armed forces. This country has taken a leading role in NATO adaptation and in arguing for the development of European defence capabilities. The additional provision demonstrates that we continue to take those responsibilities seriously.
The settlement shows that we are also serious in our determination to look after service personnel and their families. I was delighted to be able to announce last week, with my right hon. Friend the Secretary of State for Social Security, a new policy on pensions for life, ensuring that in future war widows who remarry will retain the attributable benefits that they receive from the armed forces pensions scheme.
On the equipment front, I made a statement to the House on 16 May about the Government's plans to acquire new strategic lift aircraft and air-to-air missiles for Eurofighter. With this settlement, we will be investing in further new capabilities, not only increasing our own defence capacity but contributing to the improvement of those of NATO and Europe. In particular, our analysis of operations in Kosovo identified a number of important equipment capability lessons. The highest priority among those is the need for improvements in our ability to attack targets with precision, to bomb in all weather conditions and to improve the security of our communications.
In March I announced trials to integrate Maverick anti-armour missiles on Harrier GR7 aircraft, and for enhanced security for air-to-air communications on key aircraft types, including the Harrier GR7 and the Tornado GR4. Those trials have been progressing well. Subject to their satisfactory conclusion, and to satisfactory contract negotiations, we will therefore be proceeding with the procurement of Maverick missiles. Maverick is a proven,

off-the-shelf precision guided missile that will greatly improve our capability to attack both mobile and static targets by day and by night. We can procure those missiles quickly and we expect to have an operational capability by the end of the year.
The air-to-air communications trials are almost complete. We will now go ahead with fitting the systems to a range of aircraft. Additionally, we have decided to procure as soon as possible a new precision guided all-weather bombing capability for the RAF. Global positioning satellite technology will allow us to overcome problems such as those caused by poor weather during the Kosovo campaign.
Early action on those decisions has been made possible by the provision of new money for defence. Let us be clear why the country is now able to invest more in defence: it did not come about by chance, but because the Government kept to tough spending limits while we stabilised the economy, sorted out the public finances, helped people back to work by a process of welfare reform, made tough choices and saw them through. All that helped to create the platform of stability on which we can now build the necessary investment for the future.
The settlement also confirmed another key element of our previous plans. Subject to the satisfactory conclusion of the public-private partnership for the Defence Evaluation and Research Agency, the defence budget will benefit from the receipt of a further £250 million in the next financial year. I can confirm today that we have decided to proceed with that public-private partnership.
In July 1998, as part of the strategic defence review, the Government concluded that the future for DERA could best be secured by harnessing the opportunities offered by a public-private partnership. That approach will give DERA the freedom to flourish, to develop its business and to exploit the wealth of knowledge that it has built over the years to the benefit of the wider UK economy. Those new opportunities should have a positive impact on job prospects, and the organisation will be capable of attracting and retaining staff with expertise in areas that are also in demand from other private sector companies.
On 17 April, I announced a period of consultation on a document describing our proposals. Stakeholders, including the Defence Committee, have acknowledged the improvements that we have made over earlier proposals. They have welcomed our willingness to listen to their views. The overall response has been positive, with the majority of stakeholders recognising the need for change and endorsing our proposals as a sensible way forward. The US Administration have also welcomed our new approach.
Consequently, we have concluded that we should proceed with the core competence model set out in the consultation document, separating those functions that are best performed within a private sector company and those that are best performed wholly within government. About three quarters of the current DERA will be moved to the private sector through a flotation that we will try to achieve in 2001. The terms and conditions of staff will be protected by the TUPE—transfer of undertakings and protection of employment—regulations.
Just under 3,000 staff will be retained within the Ministry of Defence to carry out research in key areas and provide a high-level overview of defence science


and technology, in-house impartial advice and the management of international research collaboration. The elements retained will include sensitive programmes and sectors such as the chemical and biological defence sector based at Porton Down, most of the Centre for Defence Analysis and the defence radiological protection service.
The retained DERA will therefore continue to perform a number of critical functions for the Government. It will be a world-class organisation offering rewarding career opportunities within the Ministry of Defence and the wider civil service. We envisage that retained DERA will continue, for the time being, under the existing trading fund arrangements.
We are confident that the principles underlying core competence are right, but we also recognise that there is more detailed work to be carried out during implementation. We will continue to consult our stakeholders closely, to ensure that any concerns are fully considered. Our timetable envisages that separation between the two parts will be achieved by the end of the year; we will then conduct a rigorous period of shadow operation to demonstrate that both organisations and their supporting infrastructure are robust and will perform as expected. As we identified in the consultation document, our preference is to seek a flotation on the stock market as soon as its potential is suitably developed and we can ensure best value for the taxpayer. We will keep open the option of seeking a strategic partner for the business as an intermediate step.
DERA is also home to the Defence Diversification Agency, which was established to take forward our commitment to strengthening links between civil and military technology. We remain fully committed to ensuring that the objectives set for the DDA are met, and we are currently reviewing how best to take forward its role in the light of the PPP process. Throughout that process, we have remained committed to the objective of ensuring the best possible future for DERA and for defence science and technology. We now have a way forward that is both workable and good for DERA, for the Ministry of Defence and for the wider UK economy; it will offer value for money to the taxpayer while ensuring that the Government and our armed forces retain access to leading edge technology.
The spending review was good for defence, good for the armed forces and good for the country. Our decision on DERA will build on that to ensure that we capitalise on a vital national asset, both ensuring the maximum benefit for defence in future and allowing our scientific expertise to develop and flourish in the wider market. I commend those decisions to the House.

Mr. Iain Duncan Smith: I thank the Secretary of State for his courtesy in allowing us early enough sight of the statement to prepare a response. I shall deal with the spending figures at the end of my questions, but let me start by welcoming the announcement of the settlement regarding war widows, which will be received with gratitude by hon. Members on both sides of the House. The right hon. Gentleman is to be commended for that.
My first question is about Maverick. I am intrigued by the fact that although the right hon. Gentleman said that he would go ahead and purchase Maverick, he added that neither the trials nor the negotiations were yet complete.

Therefore we do not know whether he will make the purchase, because one of the latter processes might fall down. It seems strange to announce the purchase of Maverick before knowing exactly what will happen.
If the RAF wants the missile, the lessons of Kosovo leave me in no doubt that it should get it, but will the Secretary of State confirm that the decision on Maverick raises questions about Brimstone? Is he aware of any delay in Brimstone's coming into service? We have talked about the first missiles being due in March, with an in-service date in October; is there to be some delay? If not, why is Maverick being introduced slightly more than a year before Brimstone, which I understood would do the same job, is likely to be introduced? Does the order indicate concern about a shortfall in Brimstone's capability that the RAF needs to plug?
When Brimstone finally enters service, will the RAF run two missile systems, with all the problems involving spares that that will engender? Will the right hon. Gentleman explain how he intends to resolve that problem, which will tend to make life more expensive and more complicated? Is it not true that he has let it be known that there will be a 25 per cent. reduction in the Brimstone order; and is it not that reduction in Brimstone numbers, not extra money, that makes available the sum needed to purchase Maverick?
I welcome the Secretary of State's announcement of the order for the global positioning satellite system, but what impact will that have on the implementation of JTIDS—the joint tactical information and distribution system? In addition, what impact will his new proposals for DERA have on that agency's involvement in the process?
Today's announcement focused on DERA. I confess that reading and hearing the statement made me think that I had read the wrong report from the Select Committee on Defence. The report I read struck me as one of the most damning I had ever read on a so-called privatisation. The Conservatives remain in favour of privatisation, provided that a case can be made, and the case of DERA is no different. The previous Government turned down the proposals on DERA, because they did not believe that the case could be made. The Defence Committee said—and I agree with it:
In our judgment the current risks of proceeding with the public-private partnership—even in its new and improved format—continue to outweigh the still hypothetical benefits.
It bases that opinion—again, I agree with it—on three main areas. The first is the relationship with the United States.
The Secretary of State said some warm words about the US relationship, but below the level of politicians discussing things with politicians, are not serious problems emerging at the working level? Owing to their fears about what is happening, British people working at DERA are being excluded from discussions with US defence companies. Practically, they are being locked out. The Secretary of State needs to give us an answer.
The second concern is what might happen to Boscombe Down, about which we heard no word. Will the Secretary of State confirm that the MOD still requires an in-house capability for aircraft testing and evaluation? Will he clarify that? If not, will he indicate the possible implications for serving RAF officers who will be forced to work in private companies? How will they be dealt with, and how will their future be secured?
On intellectual property rights, again the Defence Committee was clear, and questions remain. Private companies to which I have talked—big and small—raise exactly the same point. They have put a lot of money into such developments, but are likely to see things going against them. They are deeply unhappy about the process of ownership. The Secretary of State did not give any explanation of how the Government will resolve that big issue.
Under the Secretary of State's plans, not just units, but some of the people in them, will be put into the private sector. When the units are divided up, some people will be trespassing on both sides of the line. What will happen to them? That issue is highlighted by the question of provision for employee share ownership in the new private company. For example, the people working for the public body will not be able to own shares, but those who have been transferred to the private sector may be able to do so. How do we sort out that mess?
On DERA, it seems that the Secretary of State has determined to be indeterminate. He says that the Government will try to privatise by 2001, and a shadow organisation will be set up. If the shadow organisation highlights the problems identified by the Defence Committee, will he kill the process? Or is he driven by the Treasury to return the money, regardless of what the shadow organisation says? It is no good just saying that an organisation will be world class. Having worked in the private sector, I know that companies are world class not because the managing director says so, but because of their reputation for the quality both of the people who work for them and of the stuff that they do.
I return to the issues surrounding the budget. I wish the Secretary of State would just tell the truth about the settlement, rather than presenting it with smoke and mirrors, as is so typical of this Government. He knows very well that this is not the first real-terms increase in the defence budget in the past 15 years. I checked with the Library, just out of interest, and it pointed out that in 1996–97 there was a 0.6 per cent. increase in the defence budget. So, straight off, the right hon. Gentleman's statement was incorrect. [Interruption.] Hang on; he is to respond to these points—no doubt with yet another puff of smoke.
Three simple matters arise in connection with the budget. First, it has been falling since 1997, and is still falling. The Secretary of State inherited a budget of 2.9 per cent. of GDP, and if he is lucky, he will leave it at 2.4 per cent. of GDP. Secondly, does not the strategic defence review set a spending target of 2.4 per cent. of GDP? Even with the cash settlement, as the House of Commons Library kindly tells us, by 2003–04 the budget will fall to 2.3 per cent. of GDP—below the Government's target. The third and main point is that, as the Library's extrapolated figures show, without the panicky cash increase, the budget would have fallen to 2 per cent. of GDP by 2003–04.
The reality is that the Government have slashed defence spending to a much lower level than they inherited. That is the real reason why the Secretary of State screamed in panic at the Chancellor, "Save my life"—which he has tried to do. With the defence budget now lower than that

which he inherited, the Secretary of State will have decimated our defence forces by the next election. That is the real record.

Mr. Hoon: I am sure that the House will be intrigued by the final comments of the hon. Gentleman, who speaks for the Conservative party on defence. This is the first time that an extra £1,250 million has been described as slashing a budget. That indicates the depth of his difficulty in dealing with this matter.
The hon. Gentleman concluded with a number of comments about gross domestic product. Perhaps he has not kept up with all that his leader has been saying recently about GDP. In case he is not a regular reader of The Daily Telegraph, I will remind him. The Leader of the Opposition said:
We are making it clear that a Conservative Government will increase public spending by a smaller proportion than the growth of the economy as a whole.
That is a clear lesson, which the hon. Gentleman ought to have learned.
If the hon. Gentleman is planning to increase spending on defence, he had better say so. He had better tell the House what the Conservative party's plans are. If he has plans to increase the size of the defence budget—we have not seen any evidence of that—he needs to tell the other members of the shadow Cabinet whose budget will pay for it. If the Conservative party gets its way, the budget will be slashed right across public spending. That is clear from all that the Opposition have said in recent days in response to the Government's announcement of extra money.
If we cut the budget by the amount proposed by the Conservative party, there would be a reduction—[Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I understood that the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) wanted a reply from the Secretary of State.

Mr. Geoffrey Clifton-Brown: He is not getting one.

Mr. Deputy Speaker: Order. It is a reply, so far as I am concerned.

Mr. Hoon: To achieve the boasts of the shadow Chancellor, there would have to be a cut of 1.3 per cent., or £900 million, in the defence budget. That represents a real cut in the amount spent on defence.
We understand that the hon. Gentleman wants an increase in the amount spent on the Territorial Army. We have estimated that such an increase would cost £150 million, even without the loss to the budget if surplus equipment and property could not be sold off. That is a gap of more than £350 million in the hon. Gentleman's spending figures. If we add to that the £250 million that he wants to forgo from the proceeds of the DERA privatisation, he should tell the House how his figures add up.
In the promises made by the Conservative spokesman there is a huge hole, of the order of £1.3 billion, which is roughly the extra sum that the Government propose to spend on defence in the next three years. The hon.


Gentleman has not done his sums properly. He is promising the country that the Conservatives will spend more on defence, but the shadow Chancellor's proposals mean that they would cut the amount spent on defence.
The Opposition must tell the country what they will cut. If they intend to cut the budget, it is no good making vague promises about improving the Territorial Army, and about equipment. We need to know what they would cut. Are they proposing to cut Meteor? Are they proposing to cut Type 45? Are they proposing to cut provision for the future large aircraft, or the new carriers? I should welcome a proper explanation of the Conservatives' intentions.
When it comes to defence, the choice between the Labour party and the Conservatives is clear: the first real-terms increase in defence spending since the end of the cold war, or massive cuts in defence under the Conservative party.

Mr. Christopher Leslie: rose—[Interruption.]

Mr. Deputy Speaker: Order. An hon. Member is trying to address the House and cannot be heard. I cannot tolerate that situation.

Mr. Leslie: I welcome the settlement for war widows. That was an important announcement, as was that of the extra money for defence spending. My right hon. Friend explained that defence spending has received its first boost for more than a decade. Will he comment on the shadow Chancellor's statements on the spending review? Does he believe that the Conservative cuts guarantee would imperil the defence of the realm?

Mr. Hoon: I am grateful to my hon. Friend for his observations, especially those about war widows. Instead of making vague promises, Conservative Members should set out their precise intentions for defence. The Government are committed to spending extra money on defence in each of the next three years. Conservative Members are traipsing round the country telling everyone that they intend to cut public spending. Either they would cut public spending and defence provision or they would cut taxes. Which is it?

Mr. Menzies Campbell: Does the Secretary of State understand that in spite of his assurances, more than residual discomfort remains in the House about what appears to be a doctrinaire drive towards the privatisation of part of DERA? What is the Secretary of State's response to the report by the Select Committee on Defence, which says:
the…risks of proceeding…outweigh the…hypothetical benefits.
It continues, more colourfully, to say that the Secretary of State's proposals rely on
a wing and a prayer.
It is true that there will be an increase in projected defence spending, but in 2003–04 we will spend only 2.3 per cent. of GDP on defence. Some argue that that is the lowest level of defence spending since the Napoleonic wars. How will the figures assist the Government to persuade European allies to spend more on defence to achieve the European security and defence policy, which both the Secretary of State and I support? Do the figures

depend on maintaining the so-called efficiency saving of 3 per cent., the continuation of land sales, and the sale of DERA achieving the predicted £250 million?
Will the figures that the Secretary of State announced allow for the maintenance of the Eurofighter programme in numbers, delivery dates and service date? Will they allow for the continuation of the aircraft carrier replacement programme? Will they also allow for the replacement of the light machine gun, which the Director of Infantry seems to regard as a matter of some urgency?

Mr. Hoon: I am sorry that the right hon. and learned Gentleman believes that we have been doctrinaire about DERA. We underwent a completely new consultation process, precisely to demonstrate that we were not doctrinaire. I cannot imagine the reason for the accusation that we are doctrinaire, after we said that the results of one consultation process had not been satisfactory and that we would reconsider the position. The right hon. and learned Gentleman's criticism does not stand up.
Those who have considered the revised proposal have largely welcomed it. I accept that we will not please all of the people all of the time. I realise that that is a trait that Liberal Democrats try to display, but in government it is sometimes necessary to make a decision. We have made a decision that was strongly supported by the United States as recently as this morning. Senior United States officials who are in the United Kingdom said that they were pleased with the proposals.
As for the right hon. and learned Gentleman's suggestion about GDP, we are talking about a substantial amount of extra money—an extra £1,250 million, over and above inflation, to spend on defence. That allows us to say to our European partners and allies that they should increase their defence budgets. We are spending more money, which will allow us to fulfil the programme that we set out under the strategic defence review.

Mr. David Winnick: In view of—[Interruption.] I shall begin when the interruptions have stopped.
In view of my right hon. Friend's welcome statement today, will he say when a statement will be made about compensation for former prisoners of war of the Japanese? Does my right hon. Friend realise that the Prime Minister's welcome remarks have raised expectations among those very brave people—now far fewer in number—who suffered so terribly from starvation and torture at the hands of the Japanese? We must bear in mind the fact that 25 per cent. of British prisoners of war of the Japanese never returned—and we know why.

Mr. Hoon: My hon. Friend has quite properly pursued that matter with a great deal of commitment and effort, and I entirely share his sympathy. All I can say now is that the matter is still being considered by the Government.

Mr. Julian Brazier: Will the Secretary of State answer just two of the questions that my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) asked about DERA? First, which features of the trial involving the shadow DERA organisation will determine whether it is a success and whether the privatisation should proceed? Secondly, what


will happen to the intellectual property rights that DERA holds, many of which are of such enormous concern to small and medium-sized defence businesses throughout the country?

Mr. Hoon: The answer to both those questions will be established precisely in the process that I have set out. We shall carefully consider which intellectual property rights should remain with which organisation according to the functions that are divided. We shall certainly make a robust assessment during the shadow working of the two separate organisations, and we shall learn from that process how best to achieve our aims. There are no blueprints. That is precisely why we are not being dogmatic about the process.

Mr. Andrew Mackinlay: Full marks to my right hon. Friends the Secretaries of State for Defence and for Social Security for remedying the wrong in relation to war widows, but in his discussions with the Secretary of State for Social Security, did my right hon. Friend tackle the outstanding and irritating anomaly, which involves considerable injustice, whereby some local authorities decide not to exercise their discretion to disregard war disablement pensions in dealing with matters such as housing benefit?

Mr. Brazier: Hear, hear.

Mr. Mackinlay: Indeed, that anomaly is a cause of constant irritation to all hon. Members, and I am astonished that neither the previous Government nor this Government have addressed the issue. That would cost the Exchequer nothing, it would make local authorities face their responsibilities, and it would mean parity of treatment and value throughout the United Kingdom. Can we do it now?

Mr. Hoon: I am grateful to my hon. Friend for making the point about war widows. He says that a wrong is being done, but I should explain that most pension policies had such a provision in the past. We have been able to change an anomaly in the war widows pension scheme, but other pension schemes will need to be altered in future to try to provide consistency. That is relevant to my hon. Friend's second point. Certainly, we should like local authorities to adopt a more sympathetic attitude towards those with whom they deal. but above all, we should like them to adopt a consistent approach.

Sir Teddy Taylor: The Secretary of State says that the new DERA company will have the freedom to flourish, but does that mean that it will have the freedom to take its own commercial decisions without direction or guidance from Ministers? If that is the case, is he aware that unlike all the others, those in DERA at Shoeburyness would greatly welcome the fact, because, rightly or wrongly, they think that the guidance that Ministers have given has resulted in work being shifted from Shoeburyness to Eskmeals against the wishes of customers and against all the merits of common sense and economic judgment?

Mr. Hoon: I have heard similar arguments from others who represent areas where there are ranges, but they have

put them exactly the opposite way round. There is clearly already competition between the ranges, and the commercial freedom that we expect to be extended will be of benefit to them. The fact that the new DERA will have commercial freedom is one of the reasons why we think it important to put the organisation into the private sector.

Mr. Stephen Hepburn: May I remind my right hon. Friend that the average age of skilled workers on the Tyne is now 50, and rising? When will he make a decision on the placement of roll on/roll off ferry orders? If newspaper articles are correct—they are not always—I urge him to tell the European Parliament to keep its hands off British Government contracts for British workers. He will be aware of the concern that once again, Tyneside might lose out on a Government contract, and he knows about the importance of the decision to the future of shipbuilding on Tyneside, so I ask him to give more information.

Mr. Hoon: I am grateful to my hon. Friend for his concern. The matter is being considered carefully by the Government, and he will know that a determined effort has been made to ensure that appropriate decisions are taken on placement of the order for ro-ro ferries. His concern would more properly be directed to the European Commission rather than the European Parliament, but a constraint under which we operate is that placement must be wholly consistent with European law.

Mr. Clifton-Brown: What implications does the right hon. Gentleman's statement have for the overstretch of our troops, and what effect will it have on troop numbers in the three armed services—not only regulars, but reservists and territorials—over the next three years?

Mr. Hoon: I am grateful to the hon. Gentleman for his genuine concern about a real issue. On overstretch, we have managed to reduce our commitments. Towards the end of last year, 47 per cent. of the Army was deployed or on exercise, which caused significant overstretch. The figure is now a more manageable 27 per cent., but I recognise that we have a continuing problem with retention, which he is right to raise. Recruitment figures in recent years have been excellent, but the retention figures are somewhat disappointing. As I said in my statement, the accommodation that we make available to members of the armed forces is a cause for concern, and appears to have implications for retention. Many of those who leave the armed forces earlier than we might like cite the poor quality of some of the accommodation, so I hope that some of the extra money that we have available as a result of the Chancellor's settlement can be used to improve some fairly poor accommodation.

Mr. Syd Rapson: I add my congratulations on the issue of war widows, whose position was severely undermined by Margaret Thatcher when she was Prime Minister. My hon. Friend the Minister for the Armed Forces and I represented thousands of people who were made redundant under the previous Government, who nigh on destroyed the basis of the Ministry of Defence. On DERA, the trade unions have lobbied many of us about consultation. If the decision is


positive, will full consultation be available to them during the changeover from Government service to the private sector?

Mr. Hoon: I can certainly give that assurance. A careful programme of consultation with all those affected will be undertaken to ensure that we have the right people in the right organisations.

Mr. William Ross: It was evident from the right hon. Gentleman's statement that he intends to remedy some of the equipment defects that have shown up in recent conflicts. However, will he go further and tell us exactly how many extra soldiers, sailors and airmen there will be? Equipment is not much use if we do not have the men to wield it. Above all, what steps will he take to ensure that the soldiers on the ground have decent rifles?

Mr. Hoon: I am grateful to the hon. Gentleman for raising the question of numbers. We are committed to carrying through the decisions of the strategic defence review, and this money will allow us to do that. The SDR set out a target for armed forces numbers and aimed at a particular provision for the Army. That remains our objective, but, as I said to the hon. Member for Cotswold (Mr. Clifton-Brown), achieving it has been made more difficult by the retention problems that we have experienced. Poor accommodation is often cited as a reason for people leaving the Army earlier than we might like, so I hope that addressing that issue will have consequences for improved retention, and therefore for the size of the armed forces.

Mr. Harry Cohen: I judge from an earlier reply that the Secretary of State is content for existing patents to go across to the privatised DERA, but will a thoroughgoing assessment be made of each patent's value and implications for national defence? Will the privatised DERA play any role in advising the MOD on contract preparation and allocation?

Mr. Hoon: Certainly a vigorous determined assessment will be made of which intellectual property rights will go to which organisation, not least because that will have significant consequences for the valuation of the new company. We will ensure that a proper assessment is made of the value of each element of intellectual property transferred to the private sector. I made it clear in my statement that giving the Government objective impartial advice will continue to be part of retained DERA's function.

Mr. Crispin Blunt: Will the Secretary of State confirm that the cash increases that he has announced do not even go as far as reversing the cuts imposed under the last comprehensive spending review two years ago? Secondly, will he confirm that the 3 per cent. efficiency savings target remains in place, which puts enormous pressure on the base level and the bottom level of staff officers who have to implement it? if the right hon. Gentleman does not understand the pain caused by that target—which was imposed under his predecessor when he was mugged by the Chancellor of the Exchequer two years ago, when the target increased from 2 per cent. to 3 per cent.—he is not doing his job properly.
Thirdly, will the right hon. Gentleman confirm that it is a bit rich to try to claim that the Select Committee on Defence is in support of the transfer of DERA? When I was a member of it, it was—and according to the reports that I have read since, it still is—opposed to the proposed transfer of DERA. He talks about £250 million having to be found if the transfer does not go ahead, but the Treasury will be taking £500 million anyway from the sale of DERA, and that will not benefit the defence budget.
Is it not a sad state of affairs that the Secretary of State has to be rescued by the Chief of the Defence Staff, who had to see the Prime Minister? That is the equivalent of the Ministry of Defence's nuclear bomb. The Secretary of State is leaving the defence budget in precisely the same precarious condition. No wonder we are reading in the diary columns that he wants to go to the Department of Trade and Industry.

Mr. Hoon: I am surprised that the hon. Gentleman did not learn more about the processes of government when he was advising a previous Conservative Government. Perhaps the nature of his advice was such as to lead that Government to continue to cut the defence budget, as they did year on year for 15 years. It is astonishing to hear the hon. Gentleman, when he is supposed to know something about this issue—[interruption]

Mr. Deputy Speaker: Order. The hon. Member for Reigate (Mr. Blunt) asked about four questions when he should have asked only one, and now he is shouting from a sedentary position.

Mr. Hoon: The hon. Gentleman is complaining about the fact that extra money will be spent on defence, over and above inflation. That was never achieved by Conservative Governments while he was giving them advice. I do not know how he manages to reconcile the two. Perhaps that is why he is now a Conservative Member rather than a defence adviser. Clearly, he was a disaster as a defence adviser. Unless he improves the quality of the advice that he gives the House, he will be a disaster in his current job, too.
The reality is that—irrespective of a 3 per cent. efficiency target—we are spending extra money. Whatever level of efficiency is achieved, the benefit will accrue to the defence budget. The more efficient the armed forces—each of the three services—are, the more will be available for spending. That will be a considerable advantage for defence.

Mr. Tam Dalyell: Patchy though the circumstances may be, the view of the Royal Scots Dragoon Guards, with whom I stayed, was that their accommodation in Kosovo was excellent, and that the contractors should be congratulated on the efforts that they have made. Could something be done to relax the rules on the buying of local produce, so that fruit and other items do not have to come frozen from Britain?
On the crucial issue of retention, is not one of the problems that the families of the Royal Scots Dragoon Guards, and there are other examples, have been in Fallingbostel for eight long years? The retention problem would be somewhat eased if only the regiment could have a home posting. If we are to go on and on in Bosnia


and Kosovo year after year—four months next year and, heaven help us, six months the year after that—the retention problem will become acute.

Mr. Hoon: I am extremely grateful to my hon. Friend for his helpful and constructive suggestions, and especially for his observations about the temporary field accommodation in Kosovo. Notwithstanding the difficulties that we had in ensuring that it was available, that accommodation is now the envy of every other armed force in the theatre.
I shall look at the question of improving local purchasing, especially of fresh food, and shall write to him in due course about the result of my inquiries. I have considerable sympathy with his point about home posting. It is sensible to try to find more satisfactory ways of ensuring that members of the armed forces retain a base in the United Kingdom. That will have beneficial consequences for retention.

Points of Order

5 pm

Mrs. Gwyneth Dunwoody: On a point of order, Mr. Deputy Speaker. Have you had any approaches from the Minister of Agriculture, Fisheries and Food? I understand that the Ministry's regional offices, including the one in my constituency, are closed this afternoon in order that staff can be told of considerable job cuts. Such a major announcement should have been made in the House, because it has significant implications, not just for the civil servants concerned, but for the quality of the Ministry's work and its response to the agricultural sector. Has the Minister asked to make such a statement?

Mr. Deputy Speaker (Mr. Michael J. Martin): I must tell the hon. Lady that I have had no such information. It really is not a matter for the Chair, but the hon. Lady's words and concerns will have been heard by those on the Front Bench.

Mrs. Alice Mahon: On a point of order, Mr. Deputy Speaker. I realise that we have just had a statement on defence, but it was not appropriate to raise this matter in a statement on spending.
The Select Committee on Foreign Affairs recently stated that the action in Kosovo was almost certainly illegal under international law. A senior ex-Defence Minister has now stated:
If you ask my personal view, I think the terms put to Milosevic at Rambouillet were absolutely intolerable; how could he possibly accept them;
and he said that NATO was almost certainly spoiling for a fight. More than 250, 000 ethnic minorities have been expelled from Kosovo and, in the past 14 months, more than 1, 000 people have been killed or kidnapped under the very nose of KFOR, yet we have had no statement on the situation in Kosovo for more than 14 months. You will recall, Mr. Deputy Speaker, that during the bombing we had a statement almost every week. Is there any way in which we can get a Defence Minister to the House before the recess to tell us about the situation in Kosovo and to give us an honest appraisal of how long our forces will be there?

Mr. Deputy Speaker: The hon. Lady has made her point. It is not a matter for the Chair. She knows her way around the House and how to ask for a Minister to make a statement, and I have no doubt that those on the Front Bench will have heard her concerns.

Mr. Tam Dalyell: On a point of order, Mr. Deputy Speaker. I gave notice of this matter to the Speaker's Office.
I refer to the point of order raised by the right hon. Member for Bromley and Chislehurst (Mr. Forth) on 20 July about how a Speaker is selected or elected. The Deputy Speaker in the Chair said:
I have been asked to assure the House that Members will be given clear advice in good time about the procedures to be used on 23 October.—[Official Report, 20 July 2000; Vol. 354, c. 567.]
What is meant by "in good time"? Bluntly, if it is after Wednesday, it is not in good time; that is insufficient time. Given the entirely novel circumstances, we should have the opportunity at least to discuss the procedures for the selection of a Speaker.
I go back a long way to the election of Mr. Speaker King following the death of Sir Harry Hylton-Foster, and the election of all subsequent Speakers—Selwyn Lloyd, George Thomas and Jack Weatherill. The present circumstances are entirely different and it really is not satisfactory that we should return on 23 October having been told in the recess what the procedure is to be, or perhaps presented with a fait accompli. There are various rumours going around about how it will happen, some of which are, frankly, appalling. We should have the letter before Wednesday.

Mr. Deputy Speaker: I am grateful to the hon. Gentleman for having raised this matter and I am sure that his concerns have been heard, but all I can say is that my colleague made a statement on behalf of Madam Speaker and it would not be proper for me to elaborate on it.

BILL PRESENTED

CRIMES AGAINST HUMANITY AND WAR CRIMES

Mr. Andrew Mackinlay, supported by Dr. Norman A. Godman, presented a Bill to provide for the implementation of the Rome Statute of the International Criminal Court respecting genocide, crimes against humanity and war crimes; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 28 July, and to be printed [Bill 166].

DELEGATED LEGISLATION

Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

PATENTS

That the draft Patents Regulations 2000, which were laid before this House on 3rd July, be approved.

CONSUMER PROTECTION

That the draft Consumer Protection Act 1987 (Product Liability) (Modification) Order 2000, which was laid before this House on 3rd July, be approved.

CONSTITUTIONAL LAW

That the draft Scotland Act 1998 (Consequential Modifications) Order 2000, which was laid before this House on 7th July. be approved. [Mr. Clelland.]

Question agreed to.

BROADCASTING

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation) and Order [7 July],

That the Amendment (Cm. 4797), dated 3rd July 2000, to the Agreement (Cm. 3152), dated 25th January 1996, between the Secretary of State for Culture, Media and Sport and the British Broadcasting Corporation, a copy of which Amendment was laid before this House on 4th July, be approved.—[Mr. Clelland.]

Question agreed to.

Orders of the Day — Child Support, Pensions and Social Security Bill

Lords Amendments considered.

Clause 1

MAINTENANCE CALCULATIONS AND TERMINOLOGY

Lords amendment: No. 1, in page 2, line 34, leave out from beginning to ("and") in line 39

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this we may discuss Lords amendments Nos. 2 to 14, 64 to 66, 68 to 72, 78, 79 and 84.
I remind the House that privilege is involved in Lords amendments Nos. 17, 18, 26 and 39. If the House agrees to any of those, I shall ensure that the appropriate entry is made in the Journal.

Angela Eagle: This is a large group of minor amendments and I do not intend to speak to each one in turn, although if hon. Members have specific points on the detail, I shall be happy to try to deal with them. The amendments are technical and are necessary to ensure that the Bill, as drafted, achieves what is intended. They make a number of minor improvements or clarifications to the text or remove unnecessary duplication.
Amendments Nos. 1 and 2 avoid duplication by removing unnecessary definitions. Amendments Nos. 8, 9 and 11, relating to the new civil penalty of disqualification from holding a driving licence, are necessary because of changes currently being made to the Powers of Criminal Courts Act 1973.
The group of amendments relating to clauses 16 and 17 contains technical changes to remove duplication in the Bill as currently drafted. Amendment No. 69 is a technical amendment intended to put the intention of the Bill beyond doubt in relation to the means by which a non-resident parent must meet his child support liability.

Lords amendment agreed to.

Lords amendments Nos. 2 to 14 agreed to.

Clause 25

REGULATIONS

Lords amendment: No. 15, in page 23, line 40, leave out ("10") and insert ("10(1)")

Angela Eagle: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 62, 63, 67 and 77.

Angela Eagle: This group of amendments sets a maximum level of income to be used in the child support


maintenance calculation. The effect is to cap child support liability at a high level, which will vary with the number of children for whom a non-resident parent is responsible.
Amendment No. 62 sets the maximum net income for child support purposes at £2, 000 per week, which represents a gross income of around £170, 000 per annum. The normal child support rates and the adjustment for children living with the non-resident parent will apply to that maximum to produce a cap on liability for one child of £300 per week. The maximum liability for two children will be £400 and, for three or more, £500. Those figures will be reduced proportionately if there are children in the non-resident parent's second family and adjusted to reflect shared care.
Amendment No. 63 provides that the maximum level of income for that purpose can be changed by affirmative regulations should that prove necessary. Amendments Nos. 67 and 77 provide for the courts to award top—up child maintenance should child support liability be capped.
As I made clear during the debate on the issue in Committee, we believe that children should come first, whatever the non-resident parent's income. Children should be able to benefit from a non-resident parent's wealth in the same way as they should if they lived with the parent.
The argument advanced by Opposition Members that maintenance should in some way be related to the subsistence needs of the child only—the need to be clothed, fed and housed—is not only impracticable, but wrong. However, as my right hon. and noble Friend Baroness Hollis said in another place, we accept that the arguments on a maximum level of liability are finely balanced. There is a respectable case to be made in favour of a cap on maintenance, based in particular on the argument that, because the financial affairs of the very wealthy are often much more complicated than those of the average earner, a simple formula-based approach to setting child support liability may not always produce a just outcome.
We remain convinced that court-based agreements should, in the main, be settled in line with Child Support Agency rates. That will avoid fluctuations in the level of maintenance where the parent with care moves on or off benefit. That is why, under the reformed child support scheme, we propose to open access to the CSA for "private" non-benefit cases where parents are unhappy and the new court order has been in place for at least a year.

Mr. Steve Webb: For information, can the hon. Lady give the House an idea of the number of cases that will be affected by the cap?

Angela Eagle: The hon. Gentleman has asked that question before. We had debates about that in Committee. I made it clear that the number of people likely to be affected by a change was very small—in this case, about 120 people, and we think that that might be an over-estimate.
We have been persuaded, however, that, in the case of very high earners, the courts are better placed to unravel their financial affairs and to come to a sensible conclusion about

the proper allocation of property, spousal maintenance and child maintenance. Without a cap on child support liability, the courts might find it impossible to settle the family's financial affairs properly. With a cap, the courts will be able to work from a fixed maximum child support liability while settling other financial arrangements.
That is why we have agreed to set the cap at a high level, so long as the child or the parent with care can go back to the court for "top-up" maintenance. That means that, where child support liability is capped, parents with care or the children concerned will be able to seek additional maintenance from the courts.

Mr. Eric Pickles: On the affirmative resolution, will the hon. Lady give some guidance on whether the figure of £170, 000 may be moved in either direction—either up or down?

Angela Eagle: I assume that it would be up to the Government of the day to put anything in regulations and for the House to debate and to consider them. However, I have emphasised that we think that it is important that the cap be set at a very high level; thus, we have set it at such a level. I assume that, in the more general use of that power, the level would be moved up to take account of prices and general movements in prices and earnings. [Interruption.] Is the hon. Member for Brentwood and Ongar (Mr. Pickles) seeking to intervene?

Mr. Pickles: indicated dissent.

Angela Eagle: I thought that the hon. Gentleman was hovering.
We have agreed to set the cap at a high level, and agreed that it is appropriate that it should be at that level, so long as the child or the parent with care can go back to the courts for "top-up" maintenance. That means that, where child support liability is capped, parents with care or the children will be able to seek additional maintenance from the court. In that way, children will still be able to share in the wealth of very wealthy parents, but the way in which that takes effect will be for the courts to determine in the light of broader considerations than the CSA could countenance.
In practice, a cap set at the levels that we propose will have little effect in child support terms; this comes on to the point raised by the hon. Member for Northavon (Mr. Webb). Currently, there are very few non-resident parents on the CSA's books with income at levels which could mean that their maintenance liability under the new scheme would be capped. The effect will rather be on the way in which the courts divide up capital, property and income in cases in which substantial sums are at stake, and in which the CSA is unlikely to be involved.
The amendments will allow the courts, in establishing financial arrangements for very wealthy parents, to work from a fixed maximum child support liability—the most that could be required if either parent came to the CSA. That should make it easier to establish the other aspects of the financial package.

Mr. Pickles: I must confess to having been concerned about the Minister's health a few moments ago. Something seemed to be sticking in her craw when she made those magnificent statements about looking after very wealthy parents.
We debated the matter at length in Committee. I shall spare the House quotations from what the Minister said then—unless she insists—but in fact she said the opposite of what she has said today, and said it quite forcefully. Instead, let me quote something else. As I began my Second Reading speech with a quotation from P.G. Wodehouse, I think it only right now to give another, which strikes me as entirely apposite.
I think it was in "The Code of the Woosters" that Bertie, trying to get a point across to Jeeves, spoke of a man walking in the fog one night with his dog. The dog kept pulling at his trousers, trying to stop him. At every tug, the man got angrier—until the fog cleared, and he found that they were standing on the edge of a precipice, looking down. I feel that the Government have at last seen the fog clear, and have realised that they were standing on the edge of a precipice. Without this upper limit, the CSA would be swamped with cases.
The hon. Member for Northavon (Mr. Webb) made a good point. It matters not a jot that we are talking about 120 people now; my point in the amendments that I tabled in Committee and on Report was that the CSA would be swamped. It is, however, a little disappointing that the measure relates only to the very rich, and thus has the potential to bring about what would be nothing short of spousal dispersal.
I think it wrong of the Minister to reject the idea that the Child Support Act 1995 was about supporting children, because that is exactly what it was about. Even with the concessions that were wrung out of the Minister in the other place, there is no mechanism in the Bill allowing the child to benefit directly. I am surprised that the Minister looks surprised at what I have said, because it has been made clear in all our debates. Under the Bill, the resident parent with care could use the sums for any purpose.
Nevertheless, the Government have made a concession—owing mostly, we understand, to the tenacity of Lady Hollis, who argued strongly against the Minister and in favour of the amendment. We are glad that Lady Hollis won, and grateful to the Government for putting a reasonable face on their defeat in the Commons. However, I shall make a prediction. I think that, as the number of cases for the CSA start to increase because of the £170, 000 upper limit, the Minister will be very grateful for an affirmative resolution procedure that might change that limit. I suggest that she bring a large bottle of water to the appropriate Committee, because more things will stick in her craw.

Mr. Webb: There is rejoicing on the Liberal Democrat Benches as well, but for a rather different reason. The amendments show that the Government have finally accepted our arguments about the essence of their CSA reforms. This group of amendments recognises the principle that the formula will not fit certain cases. People involved in those cases will be able to go to the courts, and the courts will be able to examine the individual circumstances of those cases and get the answer right. It is the first breach in the armour, and the first concession to the argument that we have maintained all along—that the formula is too rigid, that individual circumstances vary greatly, and that cases have to be considered by the courts on a case by case basis.
We very much welcome the chink in the armour—the concession that the very rich are a special case. However, I hope that—as new Labour is for the many, not the few—

not only the rich are made an exception and get the benefit of a court examining their individual circumstances, but that, one day, that special treatment is given also to the poor.
We very much welcome Lords amendment No. 15, and we commend the Government on accepting the principle of our argument.

Angela Eagle: I welcome the widespread acclamation for the Government on making the concession. We listened to the arguments, and we recognised that they were finely balanced. Opposition Members should, however, realise that the change will affect very few people. I wonder whether the prediction made by the hon. Member for Brentwood and Ongar that the CSA will be swamped with such cases is part of an economic prediction that the United Kingdom will continue to do extremely well under a Labour Government and that vast numbers of people will be earning well over the maximum of £170, 000 annually, so that they will be affected by the cap. If that is his prediction, I agree with him.

Mr. Pickles: The hon. Lady is living in a parallel universe if she thinks that I was suggesting that. I am simply suggesting that, now that she has looked after the rich, lots of middle class people who would not have been affected by the measure will be drawn into the CSA and that the CSA is not capable of treating them. The Government will find that they have to reduce the £170, 000 cap simply because of the sheer injustice being inflicted on those who have much more modest incomes.

Angela Eagle: We all have to remember—this partly addresses the issues raised in his brief speech by the hon. Member for Northavon—how the CSA developed. It was created initially because the court system completely failed parents with care and their children. The Bill, from start to finish, has been about creating a CSA that works, so that we can ensure that maintenance goes to parents with care and their children. Many of those children are living in poverty because they do not receive the support that is due to them from their non-resident parent. Achieving that objective is at the centre of the Bill.
In the past, the courts have been an expensive failure. As the Bill nears the completion of its passage, we all have to work together to ensure that the CSA is properly equipped to do its job—to get maintenance flowing to the many children who are currently without it.

Lords amendment agreed to.

New Clause

Lords amendment: No. 16, before clause 36, to insert the following new clause—Report on cost of pension uprating in line with general earnings level—

" . The Government Actuary or the Deputy Government Actuary shall report to the Secretary of State his opinion on the effect on the level of the National Insurance Fund, and the effect which might be expected on the rates of contributions, in each year up to and including 2005–06 of annual increases in the basic pension by the percentage increase in the general level of earnings; and the Secretary of State shall lay a copy of the report before Parliament."

The Minister of State, Department of Social Security (Mr. Jeff Rooker): I beg to move, That this House agrees with the Lords in the said amendment.
Lords amendment No. 16 requires the Secretary of State to lay before the House a report from the Government Actuary setting out medium-term projections of the effect on the national insurance fund, and contribution rates, of uprating the basic state pension in line with earnings. The Government have no objections at all to publishing the figures as requested. Indeed, the information is effectively an amalgamation of the figures that are already contained in two reports that the Government Actuary publishes.
The first is the uprating report which is published early each year. That report contains information showing the effect on the balance in the national insurance fund, in the current and forthcoming year, of the Government's proposals for uprating of benefits and re—rating of national insurance contributions.
The second is the quinquennial review, which shows longer-term projections. That report gives snapshots up to 2060–61 and includes a table showing the level of contributions required to keep the national insurance fund in balance. The figures are given both for earnings and for price upratings.
The information is therefore not new. but I caution the House that there are all sorts of caveats on projections for more than a couple of years ahead. The surplus is the difference between two huge figures each year, but, subject to the normal caveats that I have mentioned, the Government are happy to accede to the amendment and to ask the House to accept it.

Mr. Webb: The background to the amendment is the long campaign by Baroness Castle to persuade the Government to restore the link with earnings. During this Parliament, the noble Lady has pressed the Government hard, and the Government have twice attempted to buy her off. The first occasion was under the previous Secretary of State, when she threatened troublesome amendments at a Labour party conference. She was told then that there would be a review, and she withdrew her plans. The review duly came and went, yet there was no significant change to the basic state pension, which retained its link to prices.
Baroness Castle then tabled an earnings-link amendment in proceedings on this Bill in the House of Lords. I am not an expert on the finer points of procedure there, but Labour peers said that the noble Lady had been "mugged". I am not sure what that means, but there was clearly some attempt to block that amendment. Later in the proceedings, this rather modest amendment was accepted.
In debate with Baroness Hollis, Baroness Castle said that
the Minister's total indifference to the strengthening of the basic pension arises from the fact that not only she, but also the Government, abandoned the principle of state insurance altogether.
There has been plenty of evidence of that this year. In April, the Government raised pensions by 75p. Last week, in his comprehensive spending review, the Chancellor of the Exchequer handed out £43 billion yet did nothing for the basic state pension, and this amendment should be seen in that context. The Government were elected on a manifesto pledge that pensioners would share fairly in the rising prosperity of the nation. The CSR was about carving up that prosperity, but not a penny could be found for pensions.
The amendment provides that, until 2005–06, the Government should publish estimates of the effect on the national insurance fund of earnings linking as well as price indexation, and Baroness Castle made a passionate speech about the Government's disregard for the principle of social insurance. However, the Government accepted the amendment, which should have made us suspect that it would have no effect. Baroness Hollis gave the game away when she said that
the Government have accepted the amendment and are happy to do so…we are just splicing together two sets of reports.—[Official Report, House of Lords, 19 July 2000; Vol. 615, c. 1097-1102.]
The Minister of State said the same thing when he moved the amendment—that two bits of information would be placed between one set of covers. That will not change the fact that the Government do not believe in the long-term future of the basic state pension as a true foundation for income in retirement.
What will be the effect of the annual report provided for in the amendment? A copy of the report will be placed before Parliament, but does that mean that there will be a chance every year for the House to debate the level and uprating of the basic state pension? I suspect that it does not. I suspect that the report will simply disappear into the Library of the House after publication and that it will not change any element of the Government's policy. I am sure that Baroness Castle intended the amendment to secure a real change in what the Government are doing with the values of the pension.
5.30 pm
We are concerned that the amendment does not go far enough. It requires information that is currently published to be published under a single cover instead of two. I am disappointed that Baroness Castle was unable to go further and table an amendment that would not merely have required the reporting of information on the level of the basic state pension, but would have put pressure on the Government to increase it forthwith.
The Liberal Democrats have advocated specific rates of increase, which the Chancellor should have brought forward in the comprehensive spending review last week. We have argued that there should be an across-the-board increase of £5 for all pensioners but that the older pensioners, who have suffered the most from the breaking of the earnings link, should see larger increases. We have suggested £10 at the age of 75 and £15 at the age of 80. That is a structural idea, which would go beyond the amendment and would involve the Government in not merely reporting facts but doing something about the real value of the state pension.
When Baroness Castle said in the Lords that the Government had abandoned the principle of state insurance altogether, she was right. The Government argue that anything except money on the state pension is acceptable. When we said that we would increase the pension for the older pensioners, Baroness Hollis responded in another place that that would not be well targeted; yet the winter fuel payments are even less well targeted than any addition to the basic state pension, which is the subject of the amendment.
We are disappointed that Baroness Castle was able to get only this amendment through in another place. We believe that the amendment was accepted by the Government only because it lacks any teeth. We hope that


we will get some assurances from the Government that although the Chancellor may have wanted to keep his powder dry in the comprehensive spending review, we will see not just a few extra reports under a single cover but some serious increases in the basic state pension. Pensioners not only expect that, but have a right to it.

Mr. Deputy Speaker: I remind the House that we are debating the amendment before us, not amendments that were tried in another place and did not succeed.

Mr. Paul Flynn: I am baffled by the speech of the hon. Member for Northavon (Mr. Webb), because I have no idea why the Liberal Democrats did not table their own amendment if they thought that the one selected was not strong enough. Baroness Castle's amendment went through on Wednesday, and there has been plenty of time since then to table others.
I applaud the Government for accepting the original new clause in the other place and for accepting the strengthening of the new clause by adding the words
and in order to enable Parliament to determine the introduction of such annual increases.
To me, that means that we will have a chance to debate—and, I hope, to vote on—the level of the basic pension.

Mr. Rooker: Just so that I can disabuse my hon. Friend of that idea, let me remind him that amendment (a) to amendment No. 16 has not been selected.

Mr. Flynn: I accept what my right hon. Friend says. Life is full of disappointments. We must go back to our original position—the Government are at least accepting what was moved in the other place, which is something of a breakthrough.
We already know what the Government Actuary will say. He gave evidence on 28 June to the Social Security Committee inquiry into pensioner poverty. When asked to express his view on the result of restoring the link with earnings, he said that it could be increased for up to the next five years without any additional increase in national insurance contributions. The money is already there.
Other evidence has been given in answers to the written questions tabled by my hon. Friend the Member for Bethnal Green and Bow (Ms King), to the effect that without any increases in national insurance contributions beyond inflation, the link can be restored up to 2011. Not only would that not require any additional contributions—

Mr. Deputy Speaker: Order. I think that the hon. Gentleman is going so far that he is about to start, or has already commenced, debating an amendment that has not been selected. He cannot do that. He has given a little background as to why the Lords amendment is before us; now he must speak to the Lords amendment.

Mr. Flynn: Thank you, Mr. Deputy Speaker.
The acceptance of the amendment will give new heart to the 106 Members who signed early-day motion 1 and to those who signed early-day motion 985, which relate specifically to pensions. The fact that money has been sprayed in all directions is an act of gross injustice to pensioners, if there is no remedy for the insult of the 75p increase on the basic pension. That must be put right. I believe that the Government are moving in that

direction. I cannot imagine why they hesitate for a second to announce that, for the foreseeable future, the link with earnings will be restored. It is affordable, it is justified and it would be hugely popular.

Mr. John McDonnell: I welcome the amendment. Like my hon. Friend the Member for Newport, West (Mr. Flynn), I too almost got excited because I thought that amendment (a) to amendment No. 16 had been accepted—but such is life.
The amendment will allow us to debate, at an early date, the earnings link with pensions. Although Baroness Castle was thwarted in her attempt to restore the link—as were several Members of this place—she managed to secure that fundamental report, which, I hope, will be made in the autumn. That will enable us to compare the costs of the Government's current array of benefits for pensioners with the restoration of the link for which we have argued for so long.
Previous debates have made it clear that many pensioners welcome the litany of improvements—the increased fuel allowance, free eye tests and the reductions in VAT—and the benefits that they would provide. However, the demand from all the pensioners organisations is for an increase in the basic pension and for that increase to be protected in the long term by a link with earnings in future. They argue that that is the only way to ensure that pensioners share in the growing wealth of the country.

Mr. Dafydd Wigley: Does the hon. Gentleman agree that the pressure is to make up for the loss since 1981? That would now amount to £30 a week. The report would provide yearly information, but not a means to make up that loss.

Mr. McDonnell: Clearly, the information in the report would enable us to calculate the loss, but it might go further. A report issued by the Department of Health this month showed growing inequality, both in general and because of increased pensioner poverty. More than 30 per cent. of pensioner households have incomes that are below half average earnings. A fifth of pensioners live in dire poverty—in unsatisfactory housing or in houses that have been condemned as unsuitable for human habitation.
The report proposed in the amendment should highlight such matters. However, unless it is followed by action—by which I mean an order enabling Parliament to determine the restoration of the earnings link—pensioners will be disappointed.
Recently, there has been much reporting about memos to the Prime Minister on how to get the Government back on track and how to ensure a place in history for the Prime Minister and the Government. One way to restore the Government's record among pensioners is through the proposed report. It will show that we can restore the link with earnings, which can be afforded by the national insurance fund. Pensioners would not only be lifted out of poverty but out of continued dependence on means-tested benefits. I urge the Government not only to accept the amendment but to think again about its implications for long-term policy.

Mr. Frank Field: I welcome the amendment. Given that the House can guess where the


sympathies of my right hon. Friend the Minister of State lie on the issue, I hope that, before the provisions of the amendment are effected, an announcement will be made to the House that there will be an increase in the national insurance pension, weighted to older pensioners. Those of us who canvassed in the local elections realise what a hiding we received because of this matter. I hope that the Government will not merely issue a report, but will take action before it is published.

Mr. Rooker: I am grateful for the contributions of my hon. Friends—I also consider the hon. Member for Northavon (Mr. Webb) to be a friend.
Anyone would think that the Government did not accept amendments in the House of Lords, but we did. There is no argument about that. However, at the risk of upsetting noble Lords, especially Lord Higgins and Lord Goodhart, I think that the comments that they made last week at columns 1101–02 of Lords Hansard after my noble Friend Baroness Hollis had accepted Lady Castle's amendment were impolite and insincere—and I mean that. If I were a little less diplomatic, I would probably say that those comments were outrageous but one does not say that about Members of the other place.
Given the remarks of the hon. Member for Northavon, I want to make one point clear so that there is no ambiguity. I do not want to sound pompous, but we are making law by accepting amendments to the Bill. We have accepted the amendment that has come from another place. The actual words on the amendment paper—not what people think they mean—will go on to the statute book.
It will not be an annual report, because the amendment does not call for that. There will be a report at the earliest available opportunity, which is likely to be in January. That is when the normal report on uprating appears and it is based on the uprating statement. The figures will be amalgamated from the quinquennial report and that is the earliest opportunity that the House would normally have to see those figures. The amendment calls for a report up to 2005–06, and we have accepted that. It is not practical to produce a report for when we return from the recess.
The hon. Member for Northavon can rattle on all he likes about the Government's action but I remind him that, when push came to shove, he and the Liberal Democrats even voted against the 75p increase this year.

Mr. McDonnell: Although it is true that we are debating the words that will appear in the Bill, is my right hon. Friend also clear that we are sending a message to pensioners that the Government have not closed their mind on the restoration of the earnings link with pensions?

Mr. Rooker: We are sending out all kinds of messages. By the time the report is published—the earliest available opportunity would normally be in January—the Government will have fulfilled the commitment that we gave on Budget day to put forward our proposals for consultation on the pension credit. That will be a radical departure from the status quo arrangements. Although there is still much work to be done over the coming weeks, we will keep that commitment and thereby enhance the debate and send all sorts of signals to pensioners. I assure my hon. Friend of that.
I do not want to digress, but, as one of my hon. Friends said, simply restoring the link would not, of itself, help the poorest pensioners. Hon. Members who simply advocate restoring the link as a mantra must also have the courage to say, "But this will not get any more money fast to poorer pensioners. They won't gain from that of itself." That is why we need the pension credit.

Mr. Webb: Is the Minister saying that the amendment means that we shall have a report in January that will include figures that we would have had anyway, together with figures from the quinquennial report that would also have been available? What additional information will the amendment produce next January that we would not have had anyway? Will he clarify that point?

Mr. Rooker: I made it clear that the information requested in the amendment is already available from two different sources, and I explained what they were. We will make sure that that information is pulled together in one of the publications. I do not want to be hung out to dry on this, but, in the normal process, the earliest opportunity—the one that is of most use to the House—to publish the information would be in January. The information requested in the amendment is already publicly available. There is nothing new about that at all.

Mr. Flynn: If the information is available, why did the Department of Social Security refuse to give me information about the state of the national insurance fund in 2003 and 2004, which it has done twice in response to parliamentary questions in the last six months? Does the Minister agree with Baroness Castle that targeting sounds like a good idea, but in fact is another way of describing means testing?

Mr. Rooker: I do not accept that, and I am not going to get into a row with the goddess of the Labour movement in an argument between the two Houses. She knows that, and I have told her on more than one occasion that I am not going to do that.
Without the details, I cannot respond fully to my hon. Friend's question. It may be that he was referred to the Government Actuary's report. As I said, there are big caveats on the figures published years in advance, which may be why Ministers chose not to give what could have been a misleading answer to my hon. Friend's question. However, it is open to him to come back and ask the question again.

Lords amendment agreed to.

Clause 38

PRESERVATION OF RIGHTS IN RESPECT OF ADDITIONAL PENSIONS

Lords amendment: No. 17, in page 34, line 22, at end insert—

("(4B) The regulations shall be based on the presumption that claimants have received incorrect or incomplete information unless the Secretary of State provides proof that the information the claimant received was correct and complete.")

Mr. Rooker: I beg to move, That this House disagrees with the Lords in the said amendment.
The amendment relates to inherited SERPS, and I have to say that I do not believe that it is appropriate to have a debate on the issue at this point. I do not think that any hon. Member could accept the other place tabling amendments that could lead to substantial additional spending of public money running into billions of pounds, which is the implication of the Lords amendment. However, I accept why the Lords did that. We made an announcement about inherited SERPS and explained what we planned to try to do, following reports from the Parliamentary Commissioner for Administration and the National Audit Office. As I said before, the matter is probably the single greatest example of public maladministration since the war and is a major problem. We accept that putting it right, however one chooses to do so, will cost billions of pounds.
Since we made the announcement in March, we have not been able to put any more flesh on our plans. Indeed, we said that we would not and explained that we hoped to come back before the end of the year with proposals for regulations for an inherited SERPS scheme. People are working on the issue, and the Social Security Advisory Committee has issued a consultation paper, responses to which are due in August. We shall examine those responses carefully. The Select Committee on Social Security and the Select Committee on Public Administration have taken evidence on the issue as well, so we have to have draft regulations for them to consider. In the meantime, many people at the Benefits Agency headquarters in Leeds are working to prepare the scheme.
We have to look at all kinds of matters, such as how many people might apply. We do not know whether there will be 50, 000, 5 million or 10 million applications, or even more. When we do not know how many people will apply, it takes an awful lot of background work to work out the parameters of the scheme so that it will have the capacity to deal with telephone and other inquiries. Just because we have not given any details does not mean that we are not doing anything about the situation. For example, we have to cover an issue raised in the other place, which is what kind of appeals will be processed. For instance, how do we deal with people with a severe mental disability, who may have started to suffer from dementia since making an inquiry about SERPS? We have to deal with all those matters before we introduce a scheme.
The House of Lords wanted to give the Government a nudge to remind them that they had not fallen asleep, and to ensure that the inherited SERPS scheme worked and that the Government were doing something. All that I can say is that, with the best will in the world, we intend to introduce proposals for a practical scheme that meets the original criteria that we set out regarding those people who had been, or felt they had been, misinformed, with the burden of proof being the Government's responsibility, as the ombudsman said. However, it is far too early to curtail and corral the Government in the way that the amendment seeks to do. In effect, the amendment completely wrecks anything that we plan to do with the inherited SERPS scheme, so I urge the House to disagree with the Lords.

Mr. Pickles: Strangely enough, I agree with most of what the Minister said, but I do not agree that the amendment wrecks the Government's intentions. They

have made very clear how they will deal with the inheritance rules on SERPS. The amendment would prevent any backsliding on their commitment.
The right hon. Gentleman is right to say that this is the biggest incident of maladministration since the second world war, and I, for one, certainly accept responsibility on behalf of the previous two Conservative Governments. The present Government cannot escape responsibility because we knew less than a year ago that benefits offices were giving duff information to people making inquiries, and we know even now that things are not right.
We are fortunate to have several excellent reports on the subject. I draw the attention of the House to the report of the National Audit Office and the Department of Social Security's internal audit service to the permanent secretary at the Department. Page 1 says that
in view of the extensive consideration in 1999 given to the issue of misleading information, we are concerned that from November 1999 to 10 January 2000 contradictory lines were taken in official correspondence and other sources of information about the legal position after 5 April 2000.
Even now, we do not have a complete grip on the problem.
No Member of the House can feel smug about their involvement in this issue. The House singularly failed to check the Executive on these important measures. However, I suppose the time must come when the blame game has to end. I am pleased that the right hon. Gentleman sought to deal practically with the problems. Guidelines have been issued and Ministers have given clear assurances in Committee, in this House and in another place.
We also have the NAO's recommendations and the ombudsman's report. It is to the Government's credit that they accepted the ombudsman's report. As my noble Friend Lord Higgins has said several times in another place, generally there are no clear recommendations in that report. However, it makes two recommendations that are reasonably clear. First, on page 13 in paragraph 32, the ombudsman states that the Department should provide
redress on a global, rather than an individual, basis.
Secondly, he says that the burden of proof, to which the Minister referred, that a claimant
would not have acted differently had he or she not been misinformed rested on the department.
I realise that we do not yet have regulations on the subject, and I suspect that one reason for the amendment is to give the Government a prod about that, but it seems clear from what the Government said in another place and in Committee that they intend to provide redress on an individual basis. I understand that people who want to receive compensation under the Government's scheme have to jump over two hurdles. They have to show first, that they were misled by information, and secondly, that they sustained a loss. If the Government accept the ombudsman's report, they will have to prove otherwise. However, we know from what they have said that they will not have many records to disprove claims. They have set themselves an uphill struggle.
Baroness Hollis was most helpful in a debate on 6 July 1999, when she said:
There is a very real issue of proof…No record is kept of telephone calls, any more than a record is normally kept of conversations at the desk. Paper records are kept for about six months. But if someone asserted that he had received that


misleading advice, I suspect it may well be the case that the Government would have to prove that he had not, rather than the contrary, because there would be no evidence to counterbalance it.—[Official Report, House of Lords, 6 July 1999; Vol. 603. c. 847.]
Any claimant who says that he walked into the Department's local office in one of the many parliamentary constituencies and picked up a leaflet that did not contain the information about SERPs must have a case. It would be impossible for the Government to prove otherwise.
On 15 March, The Daily Telegraph reported a suggestion that the Government were seeking written evidence that claimants had originally made a claim.

Mr. Rooker: That is not true.

Mr. Pickles: The right hon. Gentleman says that it is not true, and that reassurance is good enough for me so I will not pursue the point.
We need to see regulations reasonably soon. Given the issue of burden of proof, the lack of records and the right hon. Gentleman's reassurance, the effect will be the same whether or not the amendment is agreed to because the Government will not be in a position to disprove claims. People will only have to say that they went into an office and picked up a leaflet about retirement in which SERPS was not mentioned, so they did not take the necessary precaution of increasing their private provision. It matters not a jot how Members vote this evening, the effect will be the same. If the NAO is right, we are looking at a cost of £8 billion, admittedly over a number of years, but that cost is very great.

Mr. Webb: I agree with the noble Friends of the hon. Member for Brentwood and Ongar (Mr. Pickles) more than he does, because I agree with the amendment, and we will not support the Government's motion to disagree.
The Minister said that he wants to keep his options open—I hope that I am paraphrasing him fairly—and that the Government are in the process of drawing up regulations, so they do not want to close off any avenues. They think that the amendment may constrain their future actions. However, in saying that he is admitting that he can envisage circumstances in which the Government might want to breach the presumption in the amendment. In other words, he can envisage the introduction of regulations that do not presume that people have received incorrect or incomplete information unless they can prove that they have done.
6 pm
It is clear that the ombudsman is in no doubt. In the other place, Lord Higgins read out at some length correspondence that he had had with the ombudsman, and I shall repeat a couple of key phrases. In a letter to Lord Higgins, the ombudsman stated:
I suggested to the Department that the onus of proof was therefore reversed. It was for the Department to prove someone would not have acted differently if they had not been misinformed…The presumption had to be that anyone who could reasonably claim to have been misled and in consequence to have acted, or failed to act, to their detriment had a prima facie claim for redress.
Lord Higgins pointed out that people
will still have to prove that they suffered loss as a result.

Therefore, there are two issues: were the people given incorrect or incomplete information, and did that cause loss? People will still have to prove loss, but the presumption will be that they were given duff information, unless the Government can prove otherwise.
When the amendment was debated in the Lords, lengthy consideration was given to the question of incomplete information, as opposed to incorrect information, which, in turn, raises a broad spectrum of issues. The fundamental question is, when legislation as far-reaching as the Bill is passed, should people be informed individually? However, if the House approves the amendment, all we will be saying is that people who say that they were given incomplete information can be presumed to be telling the truth. The Government would not be required to do anything about that; even if the amendment were made, the regulations need not bind the Government to compensate everyone who was given incomplete information. In my view, compensation should be given, but that is not what the amendment would do; it merely reverses the burden of proof and leaves the Government free to make regulations based on that assumption.
I hope that the Government are not telling the House that they reserve the right not to reverse the burden of proof. The ombudsman has made his views clear and Baroness Hollis stated that the Government accepted the arguments regarding reversal. Therefore, if the amendment is not accepted, how does the Government envisage the scheme operating? Baroness Hollis said:
When the time comes for people to make their claims, we envisage asking them a few questions about how and roughly when they saw a leaflet.—[Official Report, House of Lords, 27 June 2000; Vol. 614, c. 771-72, 777.]
We are talking about events occurring from 1986 onward—leaflets that were read in the late 1980s. When I asked the Minister about the position of married women on the reduced rate, saying that many were misled, he replied that it all happened ages ago and that no one could prove that—yet the Government appear to want to keep open the option of requiring people to do precisely that.
At issue is not merely whether or not people read a leaflet, but whether or not they visited a citizens advice bureau: Baroness Hollis said that going to a citizens advice office or Age Concern, both of which were misled by dodgy leaflets, would be good enough. Therefore, if someone makes a claim, the DSS official will ask, "When did you see the leaflet?", to which the individual might reply, "I didn't see a leaflet, but I got the wrong impression." The official will then ask whether the individual went to a citizens advice bureau or Age Concern. That strikes me as being an extraordinary process.
The crucial point is that people will have to believe it is worth their while making a claim, but if there is a whiff of a suggestion that, when they phone up, they will be asked to provide proof, most will not bother; if there is any suggestion that they will be asked questions about how and roughly when they saw a leaflet, some will think that they cannot possibly remember. We shall be dealing with people who have passed retirement age: the Minister specifically mentioned people who are mentally impaired, but most people cannot remember what leaflet they looked at 10 years ago, let alone the person they chatted to at an advice centre. I am extremely concerned that the Government want to retain the option of not reversing the burden of proof.
Just before the debate, I received some comments from Age Concern, which strongly supports the amendment. It says that, unless the amendment is made,
it will still be up to individuals to make a claim; to provide details of how they were misinformed; to show they relied on this information…and to show that they may suffer financially.
That is a lot of hurdles. Showing that one has suffered financially will be extremely difficult, especially because the proof consists of having done nothing—one did not opt out, even though one might have done, because the scheme appeared to be a good one. The Government have a moral duty to erect the fewest hurdles possible, but, although they have nodded in the direction of reversing the burden of proof, they appear to want to keep their options open.
Some pensioners contacted Age Concern about the existing proposals, not the amended version; they want the amendment to be made. One said:
The majority of those misled are pensioners, many may not feel up to the task of convincing the DSS that their claim is valid.
We have to make it as easy as possible to claim because, otherwise, people will not do so; reversing the burden of proof is crucial. Another pensioner said:
Continuing the uncertainty is a constant source of distress and erosion in our lives. Can I please make my application soon, remove this worry and enjoy the time left to us?
The amendment would help to end that uncertainty, because it would guarantee the reversal of the burden of proof. The fact that the Government do not want to accept it suggest that they want to change tack in the near future. We want to reassure pensioners. We think that the Lords and the Conservative Front Benchers in the other place were right. I hope that their hon. Friends in this House will support their colleagues at the other end of the Corridor. We certainly shall.

Mr. Rooker: As I said at the outset, we have no scheme to lay before the House, so it is not possible to go into the sort of detail that hon. Members want. However, let us be straight: the purpose of the amendment is to insert into primary legislation a provision ensuring that any applicant to the inherited SERPS scheme will be deemed to have been given incorrect or incomplete information unless the Department can prove otherwise. The effect would be to allow people who have neither sought nor received information to be deemed to have received incomplete or incorrect information. That almost amounts to a policy reversal.

Mr. Webb: indicated dissent.

Mr. Rooker: Yes, it does.
The ombudsman estimates that deferring the policy change for 30 months until 6 October 2002 and introducing an inherited SERPS scheme to cover those who were misled or misinformed would cost up to £8.2 billion by 2050, so we are not talking about Government penny-pinching. However, the amendment would increase the costs significantly by opening up the scheme to people who were not misinformed because they never asked for information: reversing the policy by making the amendment would result in a cost of £23 billion by 2050.
We have made it clear that we want to protect people who were given incomplete or incorrect advice. We do not record telephone calls, so we have no evidence.

Claimants will sign a form, which has not yet been designed, saying that they phoned an office; they will sign and date it as is normal with a DSS form. We will not be able to challenge that statement—we shall have to accept what they say. That is the burden of proof under which we shall be working. The amendment would extend that protection to people who were never advised and who never asked any questions. I cannot believe hon. Members want to make a decision far in advance of the Government introducing a scheme after considering the Select Committee reports and the advice of the Social Security Advisory Committee. It would be barmy to make such a decision when the cost of the amendment, at up to £23 billion, is three times greater than the highest figure suggested for our proposals.

Mr. Pickles: I apologise for interrupting the Minister in full flow. On the question of telephone calls, if people make that call, sign the form and there is no proof that they acted in any way other than they say they did, does the fact of their having done nothing and having made no additional provision constitute sufficient proof, or will something else be required?

Mr. Rooker: The hon. Gentleman will have to wait for us to come forward with the scheme.
People will have to say at some time or another that they might have done something differently. That naturally follows if they were misinformed. They will have to say that they did not do something that they would have done owing to bad information. That is the purpose of an inquiry about SERPS in the first place. The hurdle would be information that led someone to a certain course of action; they would tell us about the false information on which they had relied.
It is not such an onerous hurdle for people to say that they made a call, the date of which they cannot remember, and were reassured that they and their spouses would be okay and that, say, the claim would be 100 per cent. As a result, they did not take action to protect their position. People could tell us that they had received advice confirming that their claim would be chopped to 50 per cent. in 2000, which subsequently led them to take out a life policy that they were mis-sold.

Mr. Webb: There are two aspects to the amendment: incomplete information and incorrect information. I said clearly, and the record will show, that it does not follow that, on agreeing the amendment, regulations would require the Government to do anything about people who received incomplete information. The amendment would merely create the presumption that if somebody said that something had happened and the Government could not disprove it, it was so. However, on incorrect information, they should have to do something. Does the Minister agree with the ombudsman when he said:
I suggested…that the onus of proof was therefore reversed?

Mr. Rooker: We have accepted the ombudsman's report and that is what we shall try to implement.
I make the point made by the hon. Member for Brentwood and Ongar (Mr. Pickles) about the global solution, which is important. I remember that before I entered the House there was an argument about a misleading answer given by the right hon. Member for


Henley (Mr. Heseltine) when he was Minister of Aviation hack in 1972. He gave as an excuse that his answer was global—but that is another point.
I have my Q and A before me; I will give the hon. Member for Brentwood and Ongar the question and the answer because it makes an important point. Does the scheme provide a global solution as recommended by the ombudsman? Yes. The ombudsman's concern, as Mr. Buckley himself said to the Public Administration Committee, was that it seemed impractical and unfair to put people through something like the special payments scheme that the Department already runs, in which they would be required to describe their circumstances in some detail and why they were entitled to redress. The inherited SERPS scheme therefore must be based on the presumption
that anyone who could reasonably claim to have been misled…had a prima facie claim for redress.
There is no doubt about that; that covers, globally, the people who were misinformed and feel that they have been misled.

Mr. Wigley: If the Government successfully disagree with the Lords amendment, will the Minister give an assurance along the lines that organisations concerned with specific aspects of the questions, such as Mencap, which deals with people with learning difficulties, will be fully consulted on the scheme? The question was raised by Lord Rix, and he did not press his amendment on that understanding. Will the Minister give such an undertaking?

Mr. Rooker: Yes, when we bring forward the scheme in draft and in full, there will be full and adequate consultation with all those who have an interest. That is not meant to be a qualification.
Achieving the task will be very difficult. The lower estimate of doing so is £8 billion, but we have no idea of the number of claimants, and the upper estimate, as I have said, is £23 billion. That is huge public expenditure. To listen to some hon. Members, who suggest doing so willy-nilly, 10 times a day, it could be paid for from the surplus in the national insurance fund.
It would not be sensible to amend the legislation. Doing so would completely scupper our proposals for an inherited SERPS scheme. I cannot put it plainer than that.

Question put, That the House disagrees with the Lords in the said amendment:—

The House divided: Ayes 287, Noes 26.

Division No. 281]
[6.14 pm


AYES


Abbott, Ms Diane
Beckett, Rt Hon Mrs Margaret


Ainger, Nick
Begg, Miss Anne


Allen, Graham
Bell, Stuart (Middlesbrough)


Anderson, Donald (Swansea E)
Benn, Hilary (Leeds C)


Ashton, Joe
Benn, Rt Hon Tony (Chesterfield)


Atherton, Ms Candy
Bennett, Andrew F


Atkins, Charlotte
Benton, Joe


Banks, Tony
Bermingham, Gerald


Barnes, Harry
Berry, Roger


Barron, Kevin
Best, Harold


Bayley, Hugh
Betts, Clive


Beard, Nigel
Blears, Ms Hazel





Blizzard, Bob
Flynn, Paul


Boateng, Rt Hon Paul
Foster, Rt Hon Derek


Borrow, David
Foster, Michael Jabez (Hastings)


Bradley, Keith (Withington)
Foster, Michael J (Worcester)


Bradley, Peter (The Wrekin)
Fyfe, Maria


Bradshaw, Ben
Gardiner, Barry


Brinton, Mrs Helen
Gerrard, Neil


Brown, Rt Hon Nick (Newcastle E)
Gibson, Dr Ian


Brown, Russell (Dumfries)
Goggins, Paul


Burden, Richard
Golding, Mrs Llin


Burgon, Colin
Gordon, Mrs Eileen


Butler, Mrs Christine
Griffiths, Jane (Reading E)


Campbell, Mrs Anne (C'bridge)
Griffiths, Win (Bridgend)



Gunnell, John


Campbell, Ronnie (Blyth V)
Hall, Mike (Weaver Vale)


Campbell-Savours, Dale
Hall, Patrick (Bedford)


Cann, Jamie



Caplin, Ivor
Hamilton, Fabian (Leeds NE)


Casale, Roger
Heal, Mrs Sylvia


Cawsey, Ian
Healey, John



Henderson, Ivan (Harwich)


Chapman, Ben (Wirral S)
Hepburn, Stephen


Chaytor, David
Hesford, Stephen


Chisholm, Malcolm
Hill, Keith


Clapham, Michael
Hinchliffe, David


Clark, Rt Hon Dr David (S Shields)
Home Robertson, John


Clark, Paul (Gillingham)
Hopkins, Kelvin


Clarke, Eric (Midlothian)
Howarth, George (Knowsley N)


Clarke, Rt Hon Tom (Coatbridge)
Howells, Dr Kim


Clarke, Tony (Northampton S)
Hughes, Ms Beverley (Stretford)


Clelland, David
Hughes, Kevin (Doncaster N)


Clwyd, Ann
Humble, Mrs Joan


Coaker, Vernon
Hurst, Alan


Coffey, Ms Ann
Iddon, Dr Brian


Cohen, Harry
Illsley, Eric


Connarty, Michael
Jackson, Ms Glenda (Hampstead)


Cook, Frank (Stockton N)
Jackson, Helen (Hillsborough)


Cooper, Yvette
Jenkins, Brian


Corbett, Robin
Johnson, Alan (Hull W & Hessle)


Corbyn, Jeremy
Johnson, Miss Melanie (Welwyn Hatfield)


Corston, Jean



Cox, Tom
Jones, Rt Hon Barry (Alyn)


Cranston, Ross
Jones, Mrs Fiona (Newark)


Cryer, Mrs Ann (Keighley)
Jones, Helen (Warrington N)


Cryer, John (Hornchurch)
Jones, Ms Jenny (Wolverh'ton SW)


Cummings, John



Cunningham, Rt Hon Dr Jack (Copeland)
Jones, Dr Lynne (Selly Oak)



Jones, Martyn (Clwyd S)


Cunningham, Jim (Cov'try S)
Jowell, Rt Hon Ms Tessa


Curtis-Thomas, Mrs Claire
Kaufman, Rt Hon Gerald


Dalyell, Tam
Keeble, Ms Sally


Darling, Rt Hon Alistair
Keen, Alan (Feltham & Heston)


Darvill, Keith
Keen, Ann (Brentford & lsleworth)


Davey, Valerie (Bristol W)
Kelly, Ms Ruth



Kennedy, Jane (Wavertree)


Davies, Geraint (Croydon C)
Khabra, Piara S


Davis, Rt Hon Terry (B'ham Hodge H)
Kidney, David



Kilfoyle, Peter


Dawson, Hilton
King, Andy (Rugby & Kenilworth)


Dean, Mrs Janet
Kumar, Dr Ashok


Denham, John
Ladyman, Dr Stephen


Dismore, Andrew
Lawrence, Mrs Jackie


Dobbin, Jim
Laxton, Bob


Dobson, Rt Hon Frank
Lepper, David


Donohoe, Brian H
Leslie, Christopher


Doran, Frank
Levitt, Tom


Drew, David
Lewis, Ivan (Bury S)


Dunwoody, Mrs Gwyneth
Lewis, Terry (Worsley)


Eagle, Angela (Wallasey)
Linton, Martin


Eagle, Maria (L'pool Garston)
Lloyd, Tony (Manchester C)


Efford, Clive
Lock, David


Ellman, Mrs Louise
Love, Andrew


Ennis, Jeff
McAllion, John


Field. Rt Hon Frank
McAvoy, Thomas


Fisher, Mark
McCabe, Steve


Fitzsimons, Mrs Lorna
McCafferty, Ms Chris


Flint, Caroline
McDonagh, Siobhain






Macdonald, Calum
Ruane, Chris


McDonnell, John
Ruddock, Joan


McGuire, Mrs Anne
Russell, Ms Christine (Chester)


McIsaac, Shona
Ryan, Ms Joan


McKenna, Mrs Rosemary
Salter, Martin


McNamara, Kevin
Savidge, Malcolm


McNutty, Tony
Sedgemore, Brian


MacShane, Denis
Shaw, Jonathan


Mactaggart, Fiona
Sheerman, Barry


McWilliam, John
Sheldon, Rt Hon Robert


Mahon, Mrs Alice
Simpson, Alan (Nottingham S)


Mallaber, Judy
Skinner, Dennis


Marsden, Gordon (Blackpool S)
Smith, Rt Hon Andrew (Oxford E)


Marshall, David (Shettleston)
Smith, Angela (Basildon)


Marshall, Jim (Leicester S)
Smith, John (Glamorgan)


Marshall-Andrews, Robert
Smith, Llew (Blaenau Gwent)


Maxton, John
Southworth, Ms Helen


Meale, Alan
Squire, Ms Rachel


Merron, Gillian
Starkey, Dr Phyllis


Michael, Rt Hon Alun
Steinberg, Gerry


Michie, Bill (Shef'ld Heeley)
Stevenson, George


Miller, Andrew
Stewart, David (Inverness E)


Mitchell, Austin
Stoate, Dr Howard


Moffatt, Laura
Stuart, Ms Gisela


Moonie, Dr Lewis
Sutcliffe, Gerry


Morgan, Ms Julie (Cardiff N)
Taylor, Rt Hon Mrs Ann (Dewsbury)


Morley, Elliot



Morris, Rt Hon Ms Estelle (B'ham Yardley)
Taylor, David (NW Leics)



Temple-Morris, Peter


Mountford, Kali
Thomas, Gareth R (Harrow W)


Mudie, George
Timms, Stephen


Murphy, Jim (Eastwood)
Tipping, Paddy


Naysmith, Dr Doug
Todd, Mark


Norris, Dan
Touhig, Don


O'Hara, Eddie
Truswell, Paul


Olner, Bill
Turner, Dennis (Wolverh'ton SE)


Organ, Mrs Diana
Turner, Neil (Wigan)


Osborne, Ms Sandra
Twigg, Stephen (Enfield)


Palmer, Dr Nick
Tynan, Bill


Pearson, Ian
Vis, Dr Rudi


Perham, Ms Linda
Walley, Ms Joan


Pickthall, Colin
Wareing, Robert N


Pike, Peter L
Watts, David


Plaskitt, James
White, Brian


Pollard, Kerry
Whitehead, Dr Alan


Pond, Chris
Wicks, Malcolm


Pound, Stephen
Williams, Rt Hon Alan (Swansea W)


Powell, Sir Raymond



Prentice, Ms Bridget (Lewisham E)
Williams, Alan W (E Carmarthen)


Prentice, Gordon (Pendle)
Williams, Mrs Betty (Conwy)


Prosser, Gwyn
Wills, Michael


Purchase, Ken
Winnick, David


Quinn, Lawrie
Winterton, Ms Rosie (Doncaster C)


Radice, Rt Hon Giles
Woolas, Phil


Rammell, Bill
Worthington, Tony


Reed, Andrew (Loughborough)
Wray, James


Reid, Rt Hon Dr John (Hamilton N)
Wright, Anthony D (Gt Yarmouth)


Roche, Mrs Barbara
Wyatt, Derek


Rooker, Rt Hon Jeff



Ross, Ernie (Dundee W)
Tellers for the Ayes:


Rowlands, Ted
Mr. David Jamieson and


Roy, Frank
Mr. Jim Dowd.



NOES


Allan, Richard
Heath, David (Somerton & Frome)


Ashdown, Rt Hon Paddy
Hughes, Simon (Southwark N)


Ballard, Jackie
Kirkwood, Archy


Beith, Rt Hon A J
Morgan, Alasdair (Galloway)


Bell, Martin (Tatton)
Oaten, Mark


Brand, Dr Peter
Rendel, David


Campbell, Rt Hon Menzies (NE Fife)
Russell, Bob (Colchester)



Sanders, Adrian


Cotter, Brian
Smith, Sir Robert (W Ab'd'ns)


Davey, Edward (Kingston)
Smyth, Rev Martin (Belfast S)


Foster, Don (Bath)
Taylor, Matthew (Truro)


Harris, Dr Evan
Tonge, Dr Jenny





Webb, Steve
Tellers for the Noes:


Wigley, Rt Hon Dafydd
Mr. Donald Gorrie and


Willis, Phil
Mr. Andrew Stunell.

Question accordingly agreed to.

Lords amendment disagreed to.

New Clause

Lords amendment: No. 18, after clause 41, to insert the following new clause—Concurrent holding of pensions—
 . A person shall be able to hold both a stakeholder pension and an occupational pension concurrently and without financial penalty.

Mr. Rooker: I beg to move, That this House disagrees with the Lords in the said amendment.
With reference to the previous amendment, I must say that in all my years in the House, I have never before been present for a Division in which every vote for the amendment would have cost £1 billion.
Lords amendment No. 18 deals with concurrency. I will not detain the House for long. The Government have met the spirit of the amendment through the recent announcement by the Inland Revenue that concurrency with stakeholder pensions would be allowed on salaries up to £30,000 a year. That covers 87 per cent. of people in defined benefit schemes—a considerable number—at a cost of £155 million. Full concurrency would cost up to £400 million. In other words, it would cost about £250 million to cover the remaining 13 per cent. of people, which cannot be justified.
I hope that the House will accept the Government's view that we should disagree with the Lords in the amendment, but that the spirit of it will be met by Inland Revenue regulations.

Mrs. Jacqui Lait: I, too, welcome the fact that the Government have moved to accept concurrency up to a salary of £30,000. Originally they were reluctant to contemplate such a figure, regarding it as a tax break for the rich, and said that they would consider concurrency for low and moderate earners.
Throughout our deliberations on the Bill, we have discovered how interesting are the Government's definitions of lower and moderate earners, which vary from time to time. For example, stakeholder pensions are available for "moderate earners" on £10,000 a year. My definition of a moderate earner is not someone who earns £10,000 a year, but we shall go with the Government.
6.30 pm
By increasing the limit to £30,000, the Government have responded to industry concerns that people should be able to take advantage both of an occupational pension scheme with defined benefits and a stakeholder pension. That makes it easier for people with a stakeholder pension to decide, for example, to accept a job that has an occupational pension scheme with a defined benefit. Other arrangements could have created a barrier.
There is also a benefit for people who have not provided for themselves as well as they should have done over the years, even under an occupational pension scheme. In those circumstances, the stakeholder pension can be used for an additional voluntary contribution.
An irony remains in the regulations. Perhaps the Minister cannot explain it; it may be down to the Inland Revenue. It is ironic that higher earners—those who are in an occupational pension scheme and earn more than £30, 000—are barred from buying a stakeholder pension for themselves, but can buy one for their non-working spouses, children or grandchildren. That applies to every Member of Parliament. It contradicts the class-conscious attitude reflected in the views on the tax break for the rich. The 13 per cent. to whom the Minister referred could take out stakeholder pensions for members of their families, who would consequently be able to take advantage of the tax break.
Conservative Members would prefer full concurrency, to avoid the ironies that I described. I understand that the Liberal Democrats also support full concurrency. Having pointed out some aspects that still require amendment, we welcome the Government's realisation that there is a need to make stakeholder pensions concurrent up to £30, 000. We therefore do not want to disagree with them.

Mr. Webb: Like the hon. Member for Beckenham (Mrs. Lait), I shall be brief, because we support the important concession that the Government have made. I believe that they made it during proceedings on the Finance Bill last week—but I stand to be corrected on that.
We have taken the view throughout our proceedings that the Government pay lip service to the notion of simplicity, while creating an awful jumble in the pensions regime. Full concurrency would be ideal, and far simpler than the Government's proposals. They have had to introduce a threshold and devise laws for the years to which the threshold will apply; it is not yet clear whether it will be indexed. Such matters add to the complexity of the system. We would therefore prefer full concurrency. However, we recognise that the Government have travelled a long way from their initial intransigence.
The hon. Member for Beckenham said that people who earned more than the threshold figure might contribute money to a pension for their non-working spouses or children. Good luck to them. Many such non-working spouses might not be those people's spouses when they reach retirement age. If we can ensure that they have pensions in their own right, so much the better.

Lords amendment disagreed to

Clause 54

PROHIBITION ON DIFFERENT RULES FOR OVERSEAS RESIDENT ETC.

Lords amendment: No. 19, in page 59, line 38, at beginning insert
("Except so far as regulations otherwise provide, ")

Mr. Rooker: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 20 to 22, 59 and 60.

Mr. Rooker: The amendments were tabled at the last minute, and it is fair to explain briefly why.
Amendments Nos. 19 to 22 would provide a power to make regulations that may specify exemptions to the current provisions of clause 54. Amendments Nos. 59 and 60 would delay the commencement of the clause by amending clause 83. The amendments relate to directive 98/49/EC, and are designed to safeguard the occupational pension rights of workers who move to other member states of the European Union.
The Government supported the directive because it protects workers who have occupational pension rights, and wish to exercise their rights to move freely in the European Union. The directive extends good practice that already applies in the United Kingdom to the treatment of occupational pensions throughout the European Union. It therefore promotes labour mobility in the EU. The terms of the directive state that provisions to implement it must be included in domestic legislation by July 2001.
When the directive was adopted, the Government's understanding, which was based on extensive consultation with the pensions industry in the United Kingdom and elsewhere in the European Union, was that UK schemes already complied with its provisions. During the Bill's passage through the other place, we were alerted to the practice of a small number of UK schemes that pay annual increases in pensions based on the rate of inflation of the country of residence, not that of the UK. That point was never raised during consideration of the directive.
We have tabled the amendments to avoid UK legislation causing UK schemes to be in breach of current UK law, even though the directive might not be breached. I can give further and better particulars if the House desires. The amendments have been tabled to include in UK law provisions that, because we did not know about the few schemes whose practice is slightly different from most pension schemes, we believed already operated.

Mrs. Lait: I shall be brief. I congratulate the Government on listening to pension industry worries so late in the day when the problem was identified. It is perhaps a lesson to us all that no one should introduce legislation at the last minute, before it has been thoroughly discussed with all the relevant groups.
We do not want to hold up the amendment, and we are glad that there is time for matters to be rectified and for necessary action to be taken. However, the lesson that needs to be learned is that EU directives need long and careful consultation. A new pensions directive is floating around; I sincerely hope that we shall not experience the same problems with it.

Lords amendment agreed to.

Lords amendments Nos. 20 to 22 agreed to.

Clause 59

CONSTITUTION AND PROCEDURE OF PENSIONS APPEAL TRIBUNALS

Lords amendment: No. 23, in page 62, line 42, after ("qualified") insert

(", persons with knowledge or experience of service in Her Majesty's naval, military or air forces")

Mr. Rooker: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 24 and 25.

Mr. Rooker: Clause 59 provides for a more flexible composition of the pensions appeal tribunals by permitting the Lord Chancellor to appoint to the pool of tribunal members who are available to hear individual cases lay members alongside legally and medically qualified members.
The amendments recognise anxieties that the clause as originally drafted may have restricted the numbers of people with knowledge or experience of service life who would be available to serve on tribunals. The amendments would give the Lord Chancellor a duty to appoint
persons with knowledge or experience of service in Her Majesty's naval, military or air services
to the pool of tribunal members.
The Bill continues to provide for the appointment of people with other experience, including persons with knowledge or experience of matters relating to the disabled. It was always intended that the Lord Chancellor would continue to appoint people with knowledge or experience of service life to the pool of tribunal members, and it is important that that is crystal clear in the Bill.

Mrs. Lait: This is becoming a routine, but I am pleased about the amendment, and pleased that the Government have included in the Bill the requirement that people with service experience should be members of the tribunals. We discussed the matter in Committee and tried to persuade the Minister to accept our amendment to that effect. He was conciliatory, and said that he hoped that people with such experience would serve on the tribunals, but he did not suggest that he was prepared to rewrite the Bill. I am therefore enormously grateful to the other House for persuading Baroness Hollis to accept the amendment, to ensure that service personnel will continue to be members of tribunals.
I thank those who initially brought the issue to my attention, and I thank the Government for accepting the amendment.

Lords amendment agreed to.

Lords amendments Nos. 24 and 25 agreed to

New Clause

Lords amendment: No. 26, after clause 60, to insert the following new clause —War widows' pensions—entitlement—

CHAPTER IV

WAR WIDOWS' PENSIONS

.—(1) The Secretary of State shall review the operation of this section when—

(a) report on the armed forces pension scheme has been laid before Parliament by the Secretary of State for Defence; and
(b) the results of any public consultation upon a report as cited in paragraph (a) above have been published;

and a report of any review carried out under this section shall be laid before Parliament.

(2) Subject to subsection (3), a widow in receipt of a widow's pension under any of the enactments mentioned in subsection (4) ("the DSS pension") and in receipt of a pension paid under the Armed Forces Pension Scheme shall on remarriage or when living together as husband and wife with a member of the opposite sex only retain the Forces Family Pension (attributable).

(3)Subsection (2) does not apply to a widow in receipt of a basic pension under section 44 of the Social Security Contributions and Benefits Act 1992; and a widow in receipt of such a pension who has remarried or is living together as husband and wife with a member of the opposite sex may not retain the Forces Family Pension (attributable).

(4)The enactments referred to in subsection (2) are—

(a) the Naval, Military and Air Forces etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,
(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,
(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939, or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),
(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.")

Mr. Rooker: I beg to move, That this House disagrees with the Lords in the said amendment.
So that there is no room for doubt, I should make it clear that we announced last week that we would introduce such a proposal by another route. I shall not spend a great deal of time on the amendment, but it is important to put a couple of points on the record. Members of the armed forces enter into a unique contract with the state. In effect, they agree to die for their country if necessary. They are commanded to go into situations where they might be killed. It goes without saying that the people of this country, especially those of my generation, who were born during the war, are extremely grateful to them for their dedication, service and sacrifice.
As the Government have said before—I have said this several times since becoming a Minister at the Department of Social Security—we have examined the case for changing service occupational pensions as part of the current review of the armed forces pension scheme. That review—that long-standing review—is considering the whole package of pension benefits available, and the outcome will be subject to full consultation. I am pleased to be able to advise the House that one of the recommendations of the review will be that all widows or widowers of service personnel covered by the pension arrangements that will be introduced following the review will be able to keep their service pensions for life.
As is normal with changes to pension arrangements, the change will apply to future service only, but we have listened to the concerns of groups such as the War Widows Association, which have campaigned for the attributable armed forces pension to be paid to widows for life, including widows who currently receive a pension and who wish to remarry. Hon. Members have expressed the concern that those widows should be able to rebuild their lives and get on with normal life without losing the attributable service pension. I have said more than once that I have considerable sympathy with that view, and several of my colleagues in the Government have also made such statements, but the question is how, within the Government machine, to take a decision.
In the exceptional circumstances when a spouse's death is attributable to service, we have decided that widows and widowers who already receive an attributable armed forces pension should be allowed to keep it if they


remarry in future. We will introduce that provision ahead of the introduction of any other change recommended by the review. The change will be introduced by amending the existing armed forces pensions regulations; it does not require primary legislation. The rules will be changed in the autumn, as soon as the necessary regulations can be amended. Therefore Lords amendment No. 26 is totally unnecessary.
Such matters are not straightforward. I am told that each service has its own regulations, and Orders in Council may be required. I am not certain whether the regulations will require the negative or the affirmative procedure. The negative procedure has the advantage that we could quickly establish a start date once the regulations are introduced, and if they wished, widows could remarry and get the benefit. If the affirmative procedure were used, there would be a delay to allow hon. Members to decide whether to pray against the regulations and force the House to debate them. That is why I cannot give a start date, but I hope that the Ministry of Defence will produce the regulations in the autumn, before the end of this Session. I do not know the date because we have not yet announced the date of the Queen's Speech, but we all know when the House will return after the recess, and work is going ahead.
Lords amendment No. 26 would require the attributable pension to be withdrawn if the widow or widower qualified for a category A DSS retirement pension. However, there is no reason why widows who have reached retirement age should not be allowed to keep their pensions if they remarry. Another reason why I ask the House to reject the amendment is that it does not go far enough.
I shall not detain the House, but I must say that no one, least of all the Government, wants to gloat; all parties have raised the issue and pressed the case for change. I pay tribute to Baroness Strange and those on whose behalf she has worked—the war widows who receive an attributable pension. The change is little enough and it has come late, but I am glad to be able to say that we want to introduce it as quickly as possible later this year.

Mrs. Lait: We are pleased that the Government made the announcement at the end of last week, and we support them in disagreeing with the Lords so that the matter can be put into the correct legislative order. We look forward to further clarification in the autumn. As the Minister has said, everyone has welcomed the change. I should like to put on record my appreciation both of the work done by Mr. Michael Colvin, the late hon. Member for Romsey, in pressing the issue on behalf of the War Widows Association, and of the work done by Baroness Strange in the other place. I congratulate the Minister on espousing the issue. He has worked hard to achieve a resolution.
The Minister clarified how the proposals will be handled, but I want things put in words of one syllable. Is it correct that two separate sets of statutory instruments will be introduced—one for those who will be widowed

in future and another for those who are already widows? If so, will they be introduced without delay, before the review of armed forces pensions?

Mr. Rooker: indicated assent.

Mrs. Lait: The Minister agrees, and I am grateful to him for that. I am not carping, but I should like him to give further clarification. He has referred to those widowed since 1973 who have not remarried, but are there any proposals for the 20 to 30 widows who have remarried? I should be grateful to him if he could give an answer, either now or in due course.
We realise that such matters are the responsibility of the MOD, and we look forward to its final review of all pensions. I recently received a parliamentary answer that said that the review would take place this summer. I suspect that the definition of the term "this summer" is about as good as the DSS definition of the word "shortly", but we look forward to the review, which we shall scrutinise closely. We welcome the announcement, and I would be grateful if the Minister would clarify that small point in due course.

Mr. David Heath: I, too, very much welcome the statement that the Minister has made today. He was at best unhappy with the answers that he gave when we discussed such matters previously. He has personally espoused the cause, and I am grateful to him for that; I am glad that the issue had a powerful advocate in government. The arguments have been presented time and again. I disagree with him only in that he said that Lords amendment No. 26 was unnecessary. I do not agree, because it was important that the point was made repeatedly to show the strength of feeling in both Houses.
As he rightly said, the Government position has not been wholly consistent; nor has that of the Conservatives. They not only refused to countenance any change when in government, but were not prepared to support such an amendment, even in the context of the Bill, at an earlier stage. A degree of opportunism has been applied to the cause in some quarters.
Having said that, let us not carp. Let us be grateful for those expressions of support, wherever they have come from. We should pay tribute to those in the other place who have been consistent on this matter, particularly Baroness Strange and Baroness Fookes, who have done much work, and my noble Friend Earl Russell, who has spoken on it many times. I reiterate the point made by the hon. Member for Beckenham (Mrs. Lait): what is the position of widows who felt it appropriate to remarry or form a permanent relationship irrespective of their financial loss in terms of the attributable pension? Will they be eligible for restitution under the statutory instruments that the Minister intends to introduce? Those are my only questions; otherwise, I welcome what has been done.

Mr. Rooker: I had not intended to speak again, but the hon. Members for Beckenham (Mrs. Lait) and for Somerton and Frome (Mr. Heath) have asked the same question, to which I have an answer. [Interruption.] Well, the answer was implied in what I said. The changes will affect widows who already receive an attributable pension; those who remarried would not have received an


attributable pension. Therefore the change will not apply to widows who remarried in the light of the circumstances that prevailed at the time. It is not possible to change that. Also, I was not conscious of its being an issue either when I first dealt with the matter at the Dispatch Box last November, or in Committee, or on Report. However, that is the legal position: widows who already receive an attributable pension will be covered by the change.

Lords amendment disagreed to.

Clause 61

APPEALS RELATING TO LOSS OF BENEFIT

Lords amendment: No. 27, in page 65, line 5, leave out from beginning to ("that") and insert

("a court makes a determination")

Angela Eagle: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 28 to 54.

Angela Eagle: Clauses 61 to 65 allow payments of certain social security benefits or training allowances to be either reduced or withdrawn when the recipient fails to meet the terms of a probation order, community service order or a combination order. We believe that people's right to support from the state depends on their meeting their responsibilities to society. That principle is fundamental to our reform of welfare. We think it wrong that people who disregard their responsibilities to society and breach sentences for criminal offences given by the courts go on expecting to receive benefit, paid for by the taxpayer, on the same terms as everybody else. We want to ensure that offenders complete their sentences as they should. We also want them to take their responsibilities to turn up to meet their probation officers or attend their community service work placements as seriously as they take their need to turn up to sign on.
Making benefit receipt conditional on compliance with community sentences will help to make it clear how important that compliance is. In the first instance, we propose to pilot that policy in a few different areas of the country to test the procedures necessary and assess the impact on offenders. For the pilots, the period of benefit withdrawal or reduction will be set at four weeks. The sanction will apply to people aged between 18 and 59 who receive income support, jobseeker's allowance or certain training allowances.
That is a benefit sanction, so the Bill as sent to the other place provided for a procedure similar to that which applies in other benefit sanctions, whereby the referral of the offender to court by the probation service is sufficient to trigger benefit loss. If the court found the breach not proven, benefit would be refunded. However, the proposal to impose the benefit sanction before the court had decided whether there had been a breach raised major concerns, and the Bill was amended to ensure that the benefit loss should follow the determination rather than the original referral to the court.
The Government recognise the strength of feeling on that issue and are willing to meet the point. To ensure that the offender is fully aware that the measure relates to conditions of entitlement to benefit and is not another

punishment by the court, the Government further amended the Bill in the Lords to provide for the Secretary of State—in the person of the Benefits Agency—to write to the offender as soon as he is referred back to court to inform him that he faces a loss of benefit unless the court finds he has not breached his community order.
By writing to the offender quickly after he has done, or has failed to do, whatever triggered his referral to court by the probation service, we will let the offender know well before the court reaches its decision that, by his actions, he has put his benefit at risk. Therefore, amendment No. 51 would impose an obligation on the Secretary of State to notify the offender at that stage, informing him that he will lose benefit unless the court finds that he has not breached the order.
Amendments Nos. 44, 47, 48, 49 and 53 would put back in the Bill the requirement to provide information at the referral stage while leaving intact similar provisions at the court determination stage. They would require the probation service, or the courts in Scotland, to notify the Secretary of State—in practice, the Benefits Agency—when an information is laid at court and proceedings are commenced. Slightly different arrangements would apply in Scotland, as was the case in the original provisions.
A number of technical amendments would put the Bill back in alignment in the new circumstances. There has also been a slight shift on timing. Amendment No. 39 would correct a drafting error to ensure that hardship payments could be made to members of a jobseeker's allowance joint-claim couple when both were subject to a community sentence sanction. Without the amendment, access to a hardship payment could not be provided if both were sanctioned; it represents purely a drafting change. The amendment raises an issue of Commons privilege. I invite the House to waive privilege and agree with the amendment.
These amendments would tidy up the original provisions and meet concerns that decisions on benefit should be taken not on the basis of an alleged breach, but only after the court had determined whether there has been such a breach. They still provide that rights to benefits are linked to the fulfilment of responsibilities to society. With the Government amendment, they would ensure that offenders understand those links and take their responsibilities seriously. I urge the House to agree with the amendments.

Mr. Pickles: We substantially agree with the Government, but we recognise that there have been considerable policy reversals—not least that to which the Minister has just referred. All those points were made in Committee, but the hon. Lady most robustly defended benefit being lost immediately. There is one thing we cannot understand, however. After the amendment was tabled in their lordships' House, the Prime Minister—in response to a series of questions put by my right hon. Friend the Leader of the Opposition—went out of his way to attack the very proposals that the Minister has introduced today. Perhaps she will explain.
The Prime Minister, who was a little excited, said:
The Tories do not like to talk about the substance of the policy…Let me tell the House also that we have introduced a measure


whereby, for breaches of community service orders, benefit is lost. The Opposition oppose that as well…let him—
referring to my right hon. Friend—
stand at this Dispatch Box…and tell us whether he will back these measures on crime, or whether he will carry on talking about them but doing nothing.—[Official Report, 5 July 2000; Vol. 353, c. 324-5.]
The Minister has just proposed a change of policy, but has she spoken to the Prime Minister? Has he told her his thinking? Why have the Government changed their mind on this important issue? After all, it is 24 July; he made those remarks on 5 July. Is the Prime Minister aware of the change? Will the hon. Lady undertake to pass him a note so that when he appears at the Dispatch Box on Wednesday he does not castigate the Opposition for the policy that she has proposed this evening.

7 pm

Mr. Webb: As we moved on to this group of amendments, my hon. Friend the Member for Somerton and Frome (Mr. Heath) murmured that consensus was about to evaporate. Although the amendments make a truly dreadful section of the Bill marginally better, we are concerned that we have reached this stage.
The Minister set out the principles on which the clauses that are being amended are based. We will support the amendments, but we wish to register our fundamental disagreement with the Government on the principle behind the clauses.
I shall explain why we take that position. The Government, including the Minister, have said that the right to support from the benefit system is conditional on the fulfilment of responsibilities to society. I invite the Minister to consider the example of someone who is imprisoned for having committed murder, rape or some other terrible crime. The state will continue to feed and clothe him and provide a roof over his head. Yet someone who commits an offence that is not nearly so serious and does not warrant imprisonment—he may breach a community order on two occasions—might be denied food, clothing and shelter. How is that a rational approach?
If someone breaches a community order, at least the amendments require the court to test whether it has been breached. It is alarming that originally the Bill did not require that test. At least the amendments introduce the test. I welcome amendment No. 28, which refers to "reasonable excuse". Some modest safeguards are being built into the Bill, but people may still potentially be deprived effectively of food, clothing and even shelter.
The Government want to push through the clause as amended, without a clear idea of what its effects will be. The Government do not know—[Interruption.] The Minister says from a sedentary position, "That is why it is piloted." There are many instances of benefits sanctions being imposed. Instead of introducing such clauses, the Government should be examining the effects of sanctions that are already in place. My noble Friend Earl Russell has argued consistently that we should not support further sanctions until we are clear of their effects.
We are talking about a client group that has already transgressed some sort of law. Depriving members of it of some means of support could have unwelcome consequences.
A deplorable measure has been made marginally better by the amendments. For that reason we shall support them, but we wish to register our strong opposition to the principle that the Minister has enunciated.

Angela Eagle: The hon. Gentleman does not astonish me much these days, but I am surprised by his intervention. The answer is for the person involved to comply with the community sentence, and that is in his own hands. By connecting rights and responsibilities, we are saying to the individual, "You must turn up for your community sentence. If you do not, there will be consequences." When someone is imprisoned he is complying with his sentence, unless he escapes.
We are piloting the changes that are set out in the amendments to ascertain whether they work. The proof will be in the pilot. We shall see whether the hon. Gentleman's dire warnings prove to be true or whether we can establish a dialogue and a narrative on rights and responsibilities in the areas with which we are concerned.
The hon. Member for Brentwood and Ongar (Mr. Pickles) needs to be reassured that my right hon. Friend the Prime Minister knows exactly what is going on. The Opposition has broadly agreed with us on these issues. We shall be extremely interested to ascertain whether we can establish an effective narrative on rights and responsibilities.

Lords amendment agreed to.

Lords amendments Nos. 28 to 54 agreed to [One with Special Entry].

Clause 73

CONTRIBUTIONS IN RESPECT OF BENEFITS IN KIND; GREAT BRITAIN

Lords amendment: No. 55, in page 76, line 19, at end insert—

("( ) In paragraph 8(1)(ia) of that Schedule (power to provide by regulations for repayment in prescribed cases of the whole or a part of a Class 1B contribution), after "part" there shall be inserted "of a Class 1 A or".")

Mr. Rooker: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 56 to 58, 61 and 80 to 83.

Mr. Rooker: We are dealing with the clauses that relate to national insurance contributions. I have taken on the role of a Treasury Minister because these clauses are in the Bill because they cannot technically go into a Finance Bill.
The amendments can be broadly split into two groups, one of which effects a technical and consequential amendment. The point was unfortunately missed when the class 1A legislation was drafted. It is to allow refunds of class 1 A national insurance contributions to continue to be made where relevant information reaches the employer late and leads him to overpay class 1A contributions through no fault of his own.
The other group of amendments comprises Nos. 56, 58 and 61. The House will be aware that following the Budget statement in March, my hon. Friend the Financial Secretary engaged in a period of consultation with


companies to find a technical solution to the problem that had arisen in relation to national insurance contributions on share option gains. I shall not go into the whys and wherefores, but an amicable solution has been reached for all concerned. I commend it to the House.

Lords amendment agreed to.

Lords amendments Nos. 56 to 72 agreed to.

Schedule 7

CLIMATE CHANGE LEVY: CONSEQUENTIAL AMENDMENTS

Lords amendment: No. 73, in page 135, line 21, leave out ("(4)") and insert ("(3)")

Angela Eagle: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this we may discuss Lords amendments Nos. 74 to 76.

Angela Eagle: These are minor and technical amendments to schedule 7 to correct drafting omissions. They provide for procedures in relation to the laying and drafting of regulations made by my right hon. and learned Friend the Lord Chancellor under the schedule, which are aligned with those already provided for regulations made by the Secretary of State. They provide also that powers under the schedule to make regulations are exercisable by statutory instrument.

Lords amendment agreed to.

Remaining Lords amendments agreed to.

Motion made and Question proposed,

That a Committee be appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments Nos. 17, 18 and 26: Mr. Richard Burden, Mr. Kevin Hughes, Mrs. Jacqui Lait, Mr. John Randall and Mr. Jeff Rooker be members of the Committee; Mr. Jeff Rooker be the Chairman of the Committee; Three to be the quorum of the Committee; Committee to withdraw immediately.—[Mr. Betts.]

Mr. Webb: I wish briefly to comment on the membership of the Committee, which contains an

important omission. Liberal Democrats are not represented and the House will be aware that we have offered a distinctive perspective on major issues, including those that the Reasons Committee will be considering. I think that on most of the issues that we have debated on the Floor of the House the official Opposition have been far less trenchant in their criticisms than Liberal Democrats. The membership of the Committee should contain both Opposition parties and not only the official Opposition.

Mr. Pickles: Further to that point of order, Mr. Deputy Speaker—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. It was not a point of order; it was a contribution to a debate.

Mr. Pickles: On whatever terms, I am most grateful to be called.
I politely point out to the hon. Member for Northavon (Mr. Webb) that he was not a member of the Committee and that the two of his colleagues who were members are not here today.

Question put and agreed to.

To withdraw immediately.

Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

GOVERNMENT RESOURCES AND ACCOUNTS BILL [MONEY] (No. 2)

Queen's recommendation having been signified—

Resolved,

That, for the purposes of any Act resulting from the Government Resources and Accounts Bill, it is expedient to authorise refunds of money paid into the National Loans Fund as the result of an error.—[Mr. Betts.]

Government Resources and Accounts Bill

Lords amendments considered.

Clause 3

PAYMENTS OUT

Lords amendment: No. 1, in page 2, line 16, after ("requisition") insert (", request")

The Economic Secretary to the Treasury (Miss Melanie Johnson): I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss Lords amendments Nos. 2 and 3.
I draw the House's attention to the fact that privilege is involved in Lords amendments Nos. 3 to 15, 17 to 23 and 26. If the House agrees to any of these Lords amendments, I shall ensure that the appropriate entry is made in the Journal.

Miss Johnson: The amendments provide for a new clause to replace clause 4 and minor consequential amendments to clause 3. The amendments have been agreed by the National Audit Office. They would permit the Treasury to repay, with the agreement of the Comptroller and Auditor General, money that
should not or need not have been paid into the Fund
and "the Fund" is now defined to include the National Loans Fund as well as the Consolidated Fund.
A specific statutory power is needed to make any payment out of the Consolidated Fund or the National Loans Fund. In addition, all such payments, except transfers between the two funds, require the prior approval of the Comptroller and Auditor General, technically known as "credit" or authority to pay. That presents a problem when sums are credited to either fund in error and should be repaid.
As the law stands, there is no power to repay any sums that are paid into either the Consolidated Fund or the National Loans Fund, but should not have been. Any such sums are effectively imprisoned inside the fund concerned. That has occasionally caused problems, so the Government believe that it would be sensible to provide a power to refund such sums from the National Loans Fund and the Consolidated Fund.
As our original intention was simply to modernise the Exchequer and Audit Departments Act 1866 relating to the Consolidated Fund, we originally sought only a power to repay sums credited in error to the Consolidated Fund. The main example that we had in mind was where Departments surrender receipts which they believe are surplus to their needs, but which they subsequently find they need to avoid incurring excess votes. However, other payments could be credited to the Consolidated Fund in error, so we sought a general power to repay sums credited in error to the Consolidated Fund. That is what clause 4 provided for prior to the amendments being made.
We decided to amend the clause for two reasons: first, a similar power was needed for the National Loans Fund;

and, secondly, discussions with the National Audit Office and our lawyers have led us to conclude that the term
as the result of an error
would not have provided the desired degree of flexibility; hence the new formulation
should not or need not have been paid into the Fund.

Mr. Oliver Letwin: I can give our response in one word: agreed.

Lords amendment agreed to.

Lords amendments Nos. 2 and 3 agreed to [one with Special Entry].

Clause 5

RESOURCE ACCOUNTS: PREPARATION

Lords amendment: No. 4, in page 3, line 13, at end insert—

("( ) For the purpose of subsection (3)(a) and (b) the Treasury shall in particular—

(a) have regard to any relevant guidance issued by the Accounting Standards Board Limited or any other body prescribed for the purposes of section 256 of the Companies Act 1985 (accounting standards), and
(b) require resource accounts to include, subject to paragraph (a), a statement of financial performance, a statement of financial position and a cash flow statement.")

Miss Melanie Johnson: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 9, 10 and 15.

Miss Johnson: I shall deal first with amendments Nos. 4, 9 and 10. When it went to the Lords, the Bill already provided that resource accounts and whole of Government accounts would be prepared in accordance with generally accepted accounting practice and, in the case of resource accounts, would need to show a true and fair view. It was the Government's view that those rigorous conditions were sufficient to ensure that the accounts would be produced in accordance with best professional practice and to the highest standard.
However, following further discussions in the Lords, the Government brought forward further amendments to clarify the basis on which the accounts would be prepared. Amendment No. 9 extended the requirement to show a true and fair view to whole of Government accounts.
Amendment No. 4, in relation to resource accounts, and amendment No. 10, in relation to whole of Government accounts, lay down in more detail than we have hitherto provided the financial statements that must be prepared for resource accounts. Rather than doing that by reference to current accounting requirements, it refers to the fundamental financial statements as defined by the Accounting Standards Board in its statement of principles for financial reporting. We believe that that will satisfy the concerns that the Opposition have expressed in that regard at various stages of the Bill, while being sufficiently "future proof' to enable resource accounts to adapt to changes in the financial reporting requirements as and when necessary.
The amendments also make it clear that the Treasury will have regard to the guidance issued by the Accounting Standards Board or any of its successors when ensuring that the resource accounts show a true and fair view and comply with generally accepted accounting practice.
I shall now deal with amendment No. 15. The existing provisions of the Bill, further reinforced by the amendments that we have just discussed, will ensure that resource accounts will be prepared in accordance with best practice and the guidance issued by the Accounting Standards Board. However, as we have always made clear, because of the particular requirements of central Government accounts, it will sometimes be necessary to adapt standard accounting practice. The Financial Reporting Advisory Board was set up in 1996 to provide advice on accounting matters generally, but in particular to advise on appropriate accounting treatments in areas where some adaptation of standard practice was required.
We believe that the current arrangements for the FRAB are working well and that the FRAB is recognised to be independent. However, to address some of the concerns that have been expressed about how the board works and to reinforce the independence of the process, the Government brought forward a new clause on Report in the Lords—amendment No. 15—which would place the following duties on the Treasury. First, before determining the accounting practices for resource accounts and whole of Government accounts, the Treasury would be required to consult with a group of persons—that is, of course, currently the FRAB—who appear to it appropriate to advise on financial reporting principles and standards.
Secondly, the Treasury must consult with the Comptroller and Auditor General in determining the composition of the group. In practice, however, the Treasury would also consult with a wider range of other interested parties. Thirdly, the group will be required to prepare an annual report of its activities, which must be laid before the House of Commons.
Those requirements ensure that the Treasury seeks independent expert advice on accounting matters. Furthermore, by requiring that the group report to the House of Commons, we shall also ensure that, in any case where the Treasury does not accept that advice, the disagreement will be brought to the attention of the House.
We believe that the explicit requirements introduced by the Government's amendments to have regard to Accounting Standards Board guidance, combined with a requirement for the Treasury to obtain expert advice on financial reporting principles and standards, will ensure that the Government's accounts meet the highest standards of accounting practice. The requirement for the FRAB to report to the House of Commons on its work will give complete transparency to the Government's accounting guidance process.

Mr. Letwin: We very much regret that their lordships, although they have done some good work, have by no means gone as far as we would have liked, or as far as we pressed the Government to go during various stages of the Bill.
I wish to ask a specific question, to which it would be helpful to have the Economic Secretary's answer on record, not least because it may influence judicial review

proceedings or other such proceedings. What was meant by the phrase that the Government used in amendment No. 10 in another place,
have regard to any relevant guidance issued by the Accounting Standards Board Limited or any other body prescribed for the purposes of section 256 of the Companies Act?
The interpretation of the phrase "have regard to" is clearly important. If it means that the Treasury can look at the guidance produced by the ASB and, having perhaps framed it in some suitable office, nonchalantly ignore it, that is a very different matter from having regard to the guidance in the sense of paying attention to, applying and living by it. If the meaning is that second possibility, their lordships have done us a great service. We seek clarification from the Economic Secretary on that point.
The deficiency in the Lords amendment is that, even if "have regard to" has a strong connotation, it is none the less quite different from giving the task of identifying appropriate definitions for Government accounts either to a specifically created body—a national accounts commission—as we originally pressed for, or to an existing body, as we later agreed on with the Liberal Democrats. The amendment contains merely a hope and a prayer that the ASB will produce relevant guidance. Does the Economic Secretary envisage the Government positively asking the board for such guidance? If so, the difference between what we pressed for and what the Lords have given us would diminish.
When the board produces relevant guidance, it must concern itself with a wide range of issues, many of which were dealt with in detail in Committee and at other stages. I certainly do not want to bore the House by going through them in equivalent detail now but, to recap briefly, we will need to know how the great obligations of the basic state pension and SERPS, of the unfunded pension liabilities and of the considerable and, under the comprehensive spending review, rapidly growing public-private partnership and private finance initiative liabilities will be accounted on the liabilities side of the balance sheet. We hope for real guidance from the board on that, and we will look to the Treasury to seek that guidance.
On the FRAB, which is the subject of Lords amendment No. 15, I hope that the Economic Secretary will be able to put some statements on record that will help the House and the Treasury to move forward after the Bill has been enacted. Under the amendment,
the Treasury shall consult a group of persons who appear to the Treasury to be appropriate to advise on financial reporting principles and standards.
I hope that the Economic Secretary will tell us that she will so arrange matters that those who "appear…to be appropriate" are renowned for their independence as well as their skill, and that she will seek, over time, to adjust the composition of the FRAB so that its independence is enhanced, in the same admirable way as, we hope, the Monetary Policy Committee of the Bank of England will become increasingly and evidently independent.
That is obviously important and coheres with the aspirations that the Economic Secretary has just enunciated. I hope that she can make it difficult for this Government and successive Governments to do anything other than choose people who are known for their independence, by putting it on the record that that is her interpretation of the intention of Parliament in Lords amendment No. 15.
In summary, this is good work, and we congratulate the Lords on improving a part of the Bill that, although it received a great deal of attention in this House, was lamentably deficient when it left it—but, alas, the Lords did not go the whole way. We hope that, following clarification from the Economic Secretary, it will be possible for a future Government to introduce a much tougher regime, bringing the setting of standards and definitions for Government accounts to the high level of rigour and independence that is prevalent in the private sector and ought to be observed in the public sector above all.

Mr. Edward Davey: As usual on this Bill, I find myself in almost total agreement with the hon. Member for West Dorset (Mr. Letwin). Our parties fought side by side in Committee to try to get an independent body to set the standards for Government accounts. The Government did not give way. I agree that the Lords have done a good job in moving them some way down that path.
I agree with much that the hon. Gentleman said about the wording of the Lords amendments, and especially the phrase "have regard to"—I hope that the Minister will give a clear and frank response—but I think that they are rather stronger than he suggested. The amendments do not allow only the Government to ask the ASB for guidance. Other parties, such as the National Audit Office, will be free to write to the board and express worries about what is going on. Indeed, the Opposition parties could do so. That is an important safeguard.

Mr. Letwin: I may have paid insufficient attention to that, and I agree wholeheartedly that perhaps our very first action—it could be a joint action—should be to seek guidance from the ASB on a range of contentious issues in the accounts.

Mr. Davey: I am grateful for that contribution.
In Committee, we expressed a concern that a future Government might fiddle around with the accounting standards in a way that is not transparent or immediately obvious and could go undetected by parliamentarians and even the NAO. When, at the start of this process, we examined the resource accounting manual, which lays down the principles, guidelines and definitions, it became immediately clear that this is a complex area with huge detail, so it will be very difficult, when a future Chancellor makes, say, the fourth or fifth comprehensive spending review statement—which may contain millions of different figures for the House to come to terms with rather quickly—for us to notice slight changes in the underlying accounting definitions.

Mr. Howard Flight: I seek confirmation that the hon. Gentleman intends that the ASB's investigation should be public and transparent.

Mr. Davey: I can confirm that. I am only surprised that the hon. Gentleman had to ask.
The benefit that the amendments bring to our scrutiny of the accounts is that, now that the ASB has a remit to issue guidance, to which the Treasury must at least

"have regard"—whatever that phrase means—there will be an independent body with a statutory duty to consider these matters and to have a watching brief for them. I hope that the board will take that new statutory function very seriously. It should note that hon. Members of all parties want that. It should see itself as the watchdog patrolling this complex area, which generally receives far too little attention from the House.
7.30 pm
This is a major step forward. I look forward to the ASB pulling up future Governments of whatever colour on any tricks that they might seek to play. However, I agree with the hon. Member for West Dorset that it is not the best solution—it is not the perfect solution. We would have liked the ASB or a similar independent body to be the initiator in the process of defining what the public sector's accounting standards should be. If I may answer his query as to what "have regard to" means, to me, it is the last-ditch defence by the mandarins to give the Treasury a last attempt at flexibility. That is why I am not totally happy with it and why I would like the ASB or a similar body to be the initiator.
The Liberal Democrats would seek to empower an independent body to be the guardian of the public sector's accounting standards. That is the best solution—we debated the matter at length in Committee—but, because we see the measure going a long way to meeting that aim, at this stage, we will not seek to disagree with the Lords on the amendments.

Miss Melanie Johnson: To answer the hon. Member for West Dorset (Mr. Letwin), it is perhaps important to rehearse where we are coming from. I remind him that the Bill requires resource accounts and the whole of Government accounts to show a true and fair view and to conform to generally accepted accounting practice—GAAP—subject only to such adaptations as are necessary in the context of departmental accounts. The Government's new amendments further strengthen that by requiring the Treasury to have particular regard to guidance issued by the ASB.
The hon. Gentleman asked what the words
have regard to any relevant guidance issued by the Accounting Standards Board
mean. They mean that the Government will apply the ASB's guidance, where it is appropriate, to the accounts of Government Departments. Compliance with the relevant accounting standards is usually necessary to ensure a true and fair view. Resource accounts will be required to meet that particular standard.
It is important to recognise—I reiterate what I said before—that any variations from the guidance will have to go through the FRAB, too, so it is not possible for such variations, as it were, to go by without some attention being drawn to them. Any proposal to depart from GAAP is discussed with the FRAB. If it disagrees with the Treasury's proposed accounting treatment, it can report to Parliament, so there is a chain of events. Were there to be any need to vary things, for whatever reason—good in our view, or otherwise in the view of the Opposition—it would require that process to be gone through. I hope that that is reassuring to Opposition Members.

Mr. Letwin: That is very helpful. I wonder whether the Economic Secretary could complete the loop by telling us


whether she will ensure that, where there is a departure from the ASB's guidance and the matter is referred to the FRAB, she will make that plain to Parliament in some appropriate way.

Miss Johnson: I am not quite sure what the hon. Gentleman is suggesting. I have said that, where there is a disagreement in some way, obviously, it must go to the FRAB, and the FRAB is in a position to report that to Parliament. I would have thought, if that disagreement were not resolved in some way, it was highly likely—it will be entirely up to the FRAB to take a view—that it would be reported. That is my understanding of the arrangements. Therefore, that disagreement will be drawn to the attention of hon. Members, including those on any Committee that might consider such matters.
As for persons with particular expertise on accounting matters, the Government are planning to consult with the Comptroller and Auditor General on the membership of the FRAB to help to ensure independence. We regard it as important that the independence, skill and expertise of such individuals be clearly established. We will seek to achieve the same objective as that of the hon. Member for West Dorset.
The hon. Member for Kingston and Surbiton (Mr. Davey) referred to ASB guidance. As I know that he is aware, the ASB does not generally provide specific guidance for particular sectors or individual bodies, but it issues standards that are of general applicability across all bodies that produce accounts. It is on that basis that we will be tied in with its guidance. It is important to recognise that what I said earlier builds into the process a number of safeguards. I hope that that meets his concerns.

Lords amendment agreed to [Special Entry].

Clause 8

COMPTROLLER AND AUDITOR GENERAL: ACCESS TO INFORMATION

Lords amendment: No. 5, in page 5, line 5, leave out

("of a government department's accounts")

Miss Melanie Johnson: I beg to move, That this House disagrees with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this it will be convenient to take Lords amendments Nos. 6 and 7 and the Government motions to disagree thereto, Government amendments (a) and (b) in lieu, Lords amendment No. 8 and the Government motion to disagree thereto.

Miss Johnson: The Government fully recognise the arguments that led to the amendments that were passed in another place. However, the amendments go far wider than is justified and contain drafting defects that need correction. The Government therefore propose instead two amendments that provide a more balanced approach to the issues. Our approach also paves the way for the Sharman review of audit and accountability, which is about to start; it will have its first meeting on Wednesday, I believe.
The main subject of the Bill is departmental accounts. Clause 8 and the preceding clauses contain provisions relating to the audit of accounts by the CAG. Amendments Nos. 5 and 6 would divorce clause 8 from that subject and

instead turn the clause into a general power of access for the CAG. By referring to "examinations" without any qualification, the amendments would extend way beyond the audit of accounts to all other examinations by the CAG, including his value for money examinations carried out under the National Audit Act 1983.
The 1983 Act contains its own provisions for access for the CAG. It has never been the intention that this Bill should extend into that Act's territory. To do so opens up entirely new issues that have not been the subject of debate or consultation at any stage so far. The Government expect that, in his forthcoming review, Lord Sharman will look at issues relating to the 1983 Act, as well as audit issues.

Mr. Robert Sheldon: Those matters were debated extensively in 1983. The Standing Committee that considered the National Audit Bill spent days and days on the matter because it felt that it was an opportunity for Parliament to reassert itself. That was important, so it looked at the nationalised industries. Unfortunately, the Chief Secretary of the day was persuaded by one or two of the more prominent nationalised industries and he gave in. That was very sad, but, as a result, the debates ranged widely. We are only now re-examining some of the major issues that were looked at then. It is right that we should.

Miss Johnson: I am grateful to my right hon. Friend for expressing his views on that matter, but to some degree I disagree about the 1983 Act because, as I have said, it is not the Government's view that that is the right territory to discuss in the context of the present Bill. Although I am sure that he knows how well it was discussed in 1983 better than I do, it is the case that that opens up an entirely different issue. I am sure that we will have some discussion of these matters. I will perhaps come back, when some right hon. and hon. Members have had a chance to contribute to the debate, to some of the reasons why we believe strongly that it is inappropriate to open up the 1983 Act as well as the audit issues; but, as I have said, the Government expect that, in the review, Lord Sharman will be able to look at the issues relating to the 1983 Act, as well as the audit issues. They are not off territory, but discussion of them is not appropriate in the context of the Bill.
I urge the House to accept the Government motion to disagree with Lords amendments Nos. 5 and 6.
Lords amendment No. 7 would give the Comptroller and Auditor General access to all bodies to which Departments or non-departmental public bodies have or can obtain access. The amendment would, in practice, give the CAG unrestricted access to all taxpayers—including, of course, businesses—to social security recipients and other recipients of Government grants, to many Government contractors and suppliers, and to virtually anyone who has financial dealings with a Department or an NDPB. That means most businesses and many other organisations, and, of course, many individuals. The amendment is therefore potentially intrusive and burdensome. Moreover, the formula "can obtain access" is unclear, and could be a source of dispute between the CAG and individuals, businesses and other organisations.
Lords amendment No. 7, especially in conjunction with Lords amendments Nos. 5 and 6, would give the CAG extensive rights of access, unrelated to the audit of


Departments' accounts, to anyone who has financial dealings with Government. It would confer a right to roam at will—Opposition Front Benchers nod in agreement.

Mr. Letwin: In case those reading the record cannot grasp what has been happening, let me say that I entirely subscribe to the Economic Secretary's description. The only difference relates to value: we consider that right to roam to be invaluable, accurate and proper.

Miss Johnson: We have already supported changes that give the CAG more rights, but we propose to give further help. Such matters can best be discussed through the independent inquiry headed by Lord Sharman, on which the right hon. Member for Haltemprice and Howden (Mr. Davis) is to sit.
The prospect of a right to roam at will is not welcomed by the British Chambers of Commerce or the Federation of Small Businesses, which said earlier this year that additional powers for the CAG could result in additional burdens on business, over-regulation and an overlap of functions. I shall explain the Government's alternative approach to the concerns that gave rise to the amendment; first, however, let me say a little about Lords amendment No. 8.
Lords amendment No. 8 attempts to give a statutory definition of a non-departmental public body. To date, there has been no such definition.

Mr. David Davis: I wonder why.

Miss Johnson: NDPBs are a wide and disparate group, and are not at all easy to define.
The amendment defines an NDPB as a body
which exercises public functions of a governmental nature which might otherwise fall to be exercised by central government.
That definition is descriptive rather than legally prescriptive, and is very wide ranging—wide ranging enough, in fact, for us to envisage the mounting of legal challenges to decisions to include or exclude certain bodies from the operation of clause 8.
The problem appears to be partially recognised in the amendment, which adds a further criterion to the first two—namely, that NDPBs are bodies with accounting officers who have been appointed by a Department. Accounting officers for bodies other than Departments, however, must be appointed under administrative arrangements that may, of course, change over time. The definition therefore rests on an administrative decision made by an individual Department with no central or parliamentary oversight. I do not consider that to be a satisfactory way of defining bodies that are subject to statutory provisions.

Mr. Edward Davey: This is not intended to be a trivial intervention. Does it not worry the Minister that the Government are unable to define their own activities?

Miss Johnson: We have lived for many years without a definition of NDPBs, although we have no difficulty in defining our own activities in this context. The Lords

amendment could lead to a definition that, for the reasons I have given, would be unworkably wide and subject to dispute, and would introduce aspects of administrative decision making. Such a definition is clearly unacceptable.
The technical deficiencies that I have mentioned illustrate the difficulties involved in devising an acceptable legal definition of NDPBs. To overcome the problems, the Government have in clause 23 taken the power to designate bodies on a case-by-case basis, and to enable the CAG to be appointed auditor of NDPBs where current statute prevents it. I hope that that will satisfy those who propose an alternative. I invite the House to reject Lords amendment No. 8.
Before I say something about the Government's position in the wider sphere, let me remind the House of some key facts. In clause 8, the Government have already given the CAG new rights of access beyond his existing statutory rights. Subsection (2)(b) gives him access to documents, wherever they are held, relating to a Department's financial records. The paragraph deals with one of the major concerns expressed by the CAG and, I believe, by the Public Accounts Committee—namely, the fact that because over the past few years many Departments have contracted out the operation of their accounting and other financial operations, the CAG needs a statutory right of access in such cases to perform his audit of departmental accounts. Subsection (2)(b), added to the Bill on Report, recognises that concern and gives the CAG that new statutory right of access.
Clause 23 gives the CAG the same access for the purpose of his audit of NDPB accounts as is provided by clause 8 for the purpose of his audited departmental accounts. Clause 23 also gives him a new power to be made auditor of NDPBs where current statute prevents that.
The Government accept that the whole issue of audit and accountability needs careful investigation. We recognise that the CAG must have the powers that he needs to do his job on behalf of Parliament, but we think that that must be balanced against equally legitimate fears that additional powers for the CAG could result in additional burdens on business in the form of over-regulation and an overlap of functions, or disincentives to initiative and risk taking. These are wide-ranging and complex issues, and the Government have therefore tabled an amendment on access to replace those made in another place.
Our amendment will enable the CAG's access to documents to be extended, in a considered way, when that is necessary. The procedure would be by draft order, subject to affirmative resolution by both Houses. The Treasury would be required to consult the CAG before making an order. That approach would allow a balance to be struck between the CAG's desire for additional access, and the need to respond to legitimate concerns about burdens on business. The extent to which the CAG needs additional access rights for audit purposes will be one of the issues considered in Lord Sharman's review, and our amendment would provide an opportunity for the implementation of its conclusions.
Our amendment is a reasonable and practical response to concerns expressed about the CAG's access rights, and I urge the House to accept it in place of the Lords amendment.

Mr. David Davis: The Minister started by saying that the Lords amendment involved drafting problems. I believe that this is the third form in which the two Houses have seen it.

Mr. Peter Brooke: The fourth.

Mr. Davis: I am told that it is the fourth, but let me deal with the first three.
The first version that the House saw was tabled in Committee and was intended to serve precisely the same purpose as this group of Lords amendments. Subsequently, similar amendments were tabled on Report. Then—this is what my hon. Friend the Member for West Dorset (Mr. Letwin) was referring to—a version was presented in the Moses Room debates. We now have the version that we are debating. Additionally, however, before the Bill was published, the Treasury was provided with a version of this group of Lords amendments, so that it could take the point on board. The Treasury has, however, made no attempt to do that.
The Minister also made a point about the Bill's purpose. She made the same point in Committee. The point that I made to her then was that more than one third of the Bill—seven of 27 clauses—is about audit. The Bill repeals 15 or 16 out of 17 of the key clauses in the Exchequer and audit departments' legislation from 1866 to 1983. If the Bill were intended simply to enable resource accounting, all it would have to do is amend elements of the control and estimates procedures operated by the House. That could have been done in a three-clause Bill. As all of the Bill's audit content is unnecessary to resource accounting, I am a little suspicious about why it has been included.
The Minister also mentioned the Sharman review. Like the right hon. Member for Swansea, West (Mr. Williams), who is one of my colleagues on the Public Accounts Committee, I am a member of the Sharman review. That review was not presented to either of us as an alternative to amendments to the Bill. If it had been, I do not think that either of us would have become a member of the review. The key reason for that is that the Sharman review cannot deliver the necessary statutory vehicle to entrench the House's rights. This Bill is about the House's rights. It is not about technical accounting matters or methods of measurement, but about the rights of this House. This group of Lords amendments is certainly about the rights of this House.
The purpose of the Lords proposed amendment to clause 8 was quite straightforward. It provided:
8.—(1) For the purposes of an examination by the Comptroller and Auditor General—
(a) he shall have a right of access at all reasonable times to any relevant documents, and
(b) person who holds or has control of any of those documents shall give the Comptroller and Auditor General any assistance, information or explanation which he requires in relation to any of those documents—
so far, so good.
We were told about a right to roam. That right would apply to documents that are
held or controlled by a government department or a relevant non-departmental public body, or
(b) which are documents to which a government department or a relevant non-departmental public body has, or can obtain, access.
That is the limitation—it is not an unfettered right to roam.
The National Audit Office and the Comptroller and Auditor General cannot go to every paperclip supplier to the Government and ask to see the accounts or performance records. They will have to follow the access guidelines that the Government themselves follow. I shall deal with that matter at the end of my speech, when I address the issue of burden.
As our consideration of the Bill will be examined in some detail in the other place, I should like to put on record the Comptroller and Auditor General's views on the issue. The Minister has represented the proposals as a Government concession. However, from the Comptroller and Auditor General's point of view, the order-making power that the Minister described is not only an unsuitable alternative, but a retrograde step. There are four reasons for that.
First, the power provides the Treasury with the right to decide to which bodies the Comptroller and Auditor General can or cannot have access. The Public Accounts Committee—under my chairmanship, and under that of my predecessor—has consistently argued that the CAG's access should never be at the discretion of the Executive. Allowing such a discretion would negate the purpose of the CAG and the original purpose of the PAC. We should not forget that Ministers are accountable to Parliament; it is not the other way round.
Secondly, the proposal does nothing to overcome the problem of the time-consuming negotiations that are currently necessary to secure access. The PAC has commented that such negotiations are administratively burdensome and diminish the CAG's independence in many ways. The Government amendments would make that worse and add additional hoops for the CAG to go through in negotiating access. In a moment, I shall give the House an example of how that process operates.
Thirdly, the provision would also place the CAG's access powers in secondary legislation, rather than in primary legislation. Hon. Members know how easy it is for the Government to amend secondary legislation in a relatively unscrutinised manner. Such an arrangement would in itself be a bad thing.
Finally, the effect of the order-making power is to add to the hotch-potch of arrangements referred to in the Committee's ninth report. It is not a global solution and will allow current anomalies to be handled only on a piecemeal basis. That is in contrast to the Lords amendments in this group, which establish the clear principle that the CAG should have equal access rights to the Government.
Those are the views of the CAG. I have put them on the record because I think that they will be very important to considerations in the other place if, as we expect, the Government press their amendments in this group and the matter returns to the other place.
The purpose of those Lords amendments, and of their House of Commons predecessors, was not to create anything new, but to reinstate Parliament's rights of


oversight, which were established in the Exchequer and Audit Departments Act of 1866, 1921 and 1957. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), my predecessor on the PAC, is in the Chamber. I suspect that he will correct me if I am wrong in my suspicion that, had consideration of the National Audit Act 1983 not been foreshortened by the 1983 general election, the powers would have been dealt with and corrected in that legislation. There was certainly an intention to do so.
Therefore, we are talking about reinstating Parliament's rights. To do that, we shall have to deal with the erosion of those powers that has occurred over many decades. I am not making a political point, as the erosion occurred under Governments of all persuasions, from the Wilson Government onwards. Indeed, it began with the creation of those very bodies that the Minister had such trouble defining—non-departmental public bodies. Subsequently, the erosion continued with companies wholly owned by the Government, with contractors and with other bodies outside the usual purview of the CAG.
All those bodies were created to allow the Government to do their business more efficiently, and there is nothing wrong with that. The side effects, however, have suited Whitehall. I do not think that the erosion has necessarily suited Ministers, and I doubt that most Ministers, in whatever Government, have even thought about it. Over the years, the erosion has suited Whitehall and the Sir Humphreys. It is certainly more a sin of the Sir Humphreys than of Ministers.
As I said, the Lords amendments in this group will not cause public money to be followed wherever it goes, and they do not provide a complete right to roam. The amendments are limited to the issue of governmental access. Therefore, both in the Lords and in this place, we have been trying to stop and reverse the process that started with the creation of companies and agencies and allowed them to escape oversight.
The process is more important now than ever before. The Government themselves have said that they are proposing to use the private finance initiative to provide £75 billion worth of value. Therefore, the process affects a huge tranche of public expenditure. If we are to make those PFIs work, as both sides of the House wish, it is vital that Parliament maintains oversight. The set of modifications in the amendments would not necessarily allow that to happen. They would leave Parliament's ability to maintain oversight entirely at the discretion of the Government of the day.
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We should not assume that the Treasury would permit these rights automatically. Time and again, even in the course of the Bill's passage through Parliament, the Treasury has argued that the Comptroller and Auditor General should not have access to private bodies. That happened in connection with housing associations, which now are known as registered social landlords. It will happen again in connection with the PFI companies that will deliver public services in coming years.

Mr. Letwin: Does my right hon. Friend agree that the Minister's argument about intrusion, which she said was

not welcomed by the British Chambers of Commerce and other bodies, has force only if the Treasury intends not to apply the Government's amendment on a general scale?

Mr. David Davis: I can see my hon. Friend's point, but to talk about intrusion, regulatory burdens and inspection overload is to misunderstand how the CAG and the National Audit Office work. It costs about £10 million a year to run the NAO. That is good value for money. The NAO is a minnow when compared with the regulatory arm of Government. Inspections by the CAG and the NAO probably amount to less than one tenth—perhaps only one hundredth—of 1 per cent. of the regulatory burden of any Government. Moreover, such inspections would be necessary only when a problem arose. As a result, the regulatory burden would be very well directed, as I shall show.
In essence, my argument is that, where public money is paid out to achieve major public policy gains, Parliament always has the right to know what is happening. The House is a tax-raising legislature, and its first job is to raise the money. It also approves policies, so on both counts we need to know what is happening. That knowledge should not be at the behest of the Executive.

Mr. William Cash: Does the same argument not apply to the BBC? Although it does not raise money by way of taxation through this House, it does raise money through the licence. Should there not be a degree of public audit of the corporation's activities? I understand that there is no access to the BBC's accounts. Can my right hon. Friend confirm that? If true, is that not astonishing?

Mr. Davis: I agree with my hon. Friend. He reflects the views of the Select Committee on Culture, Media and Sport on the matter, and of the report compiled by the Gavyn Davies commission. It is one of my rules of thumb that organisations that protest most about audit almost certainly are those that need it the most. I suspect that that will be true of the BBC in the coming years.
To prove that this is not a dry, theoretical matter, I shall give the House a topical example. Today, the NAO published a report entitled "Overseeing the Focus Housing Association". I remind the House that housing associations can only be accessed by the NAO after negotiation with the Housing Corporation. The report tells the story of a housing association that lost about £1.5 million of public money over four or more years at the beginning of the 1990s.
The Housing Corporation was warned about the problem, but it largely ignored the warnings. The matter was raised by the hon. Member for Birmingham, Erdington (Mr. Corbett), after which the NAO approached the association and began a study.
The fraud that was taking place involved bribes and the other apparatus of fraud. As soon as the NAO study was under way, the details of the fraud surfaced in an unavoidable manner, and the Serious Fraud Office became involved. Three of the people involved have now gone to jail.
In September 1997, the SFO told the NAO that it could resume work on the study. For six months, the Housing Corporation resisted attempts by the NAO to gain access to Focus. In explanation, it tried to maintain that the NAO had not asked before. Then it said that the NAO should


tell the corporation what it wanted, and that the corporation would approach Focus and copy any relevant documents to the NAO.
When that tactic failed, the corporation suggested that the NAO should talk to the Department of the Environment, Transport and the Regions. After that, the corporation said that it would sound out the chief executive of Focus, and then asked about the exact nature of the files to be examined. Eventually, it said that the NAO could go to Focus as long as the corporation went as well. After six months, the NAO was allowed access to Focus, and today's report is the result.
So for six months the Housing Corporation resisted the NAO which, as Parliament's auditor, looks into the misuse and misappropriation of public funds. All sorts of things can happen during such a long delay, and all sorts of things can disappear. The NAO report refers to at least one meeting that was not minuted and for which no documents exist.
The Housing Corporation was irresponsible, but its behaviour is not unique. Similar incidents have taken place with regard to whistleblowers. For example, the NAO could not gain access to contractors to a technical college in the north of England. The same thing happened with contractors for what was then known as the Overseas Development Administration. For several years, because of Treasury obstruction, the NAO could not gain access to training and enterprise councils. Until the Secretary of State for Culture, Media and Sport agreed to amend a recent Bill, the NAO could not gain access to Camelot.
That demonstrates why it is ridiculous in practical terms to propose that the House should be beholden to any arm of the Executive before it can examine closely what that arm has been up to. The proposal would be crippling: it would undermine the standing of the Comptroller and Auditor General and, as a result, the standing of the House.
The proposal does not help democracy, and it does not even advance the Government's objective of getting value for money for their public policy aims. As a result, the amendment falls far short of what is needed, which is to reinstate the rights of the House as they applied half a century ago. Those same rights should apply today.

Mr. Edward Davey: I begin by associating my party with what the right hon. Member for Haltemprice and Howden (Mr. Davis) said. He has spoken powerfully at all stages of the Bill's progress through Parliament and, in his role as Chairman of the Public Accounts Committee, he has spoken for the whole House. He made a compelling case.
I have had many discussions with Liberal Democrat peers in the House of Lords. They have been persuaded that extending the institutional jurisdiction of the NAO is the right approach. They are convinced that this is a constitutional issue, involving the relationship between the legislature and the Executive. Interestingly, they also consider that, given that this is a financial matter, they need to listen to the House of Commons. After all, the House of Commons is supposed to be superior in financial matters.
The Government would do well to heed those remarks. They should be aware that people from all parties—certainly from the Liberal Democrat party and, I believe, from the Conservative party in the other place—take this

matter seriously and will continue their opposition when this place and the other place start playing ping-pong with the amendments.
The Government should not be surprised at this. When we debated similar amendments in Committee, I warned them that they were getting into danger. I made particular reference to the fact that many Labour Members are extremely sympathetic to such a change. I warned the Government that it would be rather odd for the House of Commons to play ping-pong with the House of Lords over the issue when the majority of right hon. and hon. Members from all sides agreed with the proposals.
I hope that the Government are leaving room for a gracious backdown in due course, although the amendments do not seem to suggest it. Such a back-down may be forced upon them. I do not believe that the Government really want to invoke the Parliament Acts to get their way. By that time, the broadsheet editors—perhaps even the tabloid editors—would be asking what the Government had to hide.
Right hon. and hon. Members should realise the significance of the Lords amendments and of the Bill. It is very unusual for the House of Commons to debate these matters. That point was made time and again in Committee and on Report. The House of Commons does not often focus on Government accounts—we worked out that it happened about every 60 years. Therefore, this is a unique opportunity—we cannot wait another 60 years before putting this matter right. How many other non-departmental public bodies will have been dreamed up in the mean time, and how much more public money will not be open to scrutiny by the NAO? We have to move now.
The Minister has said that the Sharman review is under way and that it will consider this. There is no guarantee that the Sharman review will result in any statutory proposals. The Government have not gone on record as saying that. Even if they did, how could we believe that?

Mr. David Davis: I specifically asked the Chief Secretary whether there was a guarantee, or even a likelihood, of further legislation to carry forward any Sharman proposals, and the answer was no.

Mr. Davey: I think that the whole House is grateful for that intervention, which emphasises the importance of what we are debating. If the House does not grasp the chance before it tonight, we will not get another one for many years.
Accepting the Lords amendment would in no way jeopardise the role and significance of the Sharman review. In many ways, the review would be very timely, coming on the back of such an amendment. It could assist the NAO in discussions with the NDPBs involved, to work out how the NAO could usefully introduce the new powers. It could give guidance to the NDPBs about how the powers might be used. So the Sharman review would still play an important role in this regard and in many other aspects of the remit given to it by the Chief Secretary. In no way would accepting the amendment undermine the Sharman review—I believe that it would strengthen its relevance and purpose to those bodies which benefit from public money.
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I do not want to leave this matter to a taskforce or review. This is a parliamentary matter which this place should decide. We should not be leaving it to reviews led by the great and the good, even though there is distinguished parliamentary representation on the Sharman review. [Interruption.] The right hon. Member for Haltemprice and Howden says from a sedentary position that Lord Sharman is a Liberal Democrat peer. When the right hon. Gentleman was talking about other Members of this House on the review, I am sure it was just an oversight that he forgot to mention my hon. Friend the Member for Newbury (Mr. Rendel), who will, I am sure, give the review distinguished service. However, that is not the point. This House, not reviews, should be deciding these issues of parliamentary scrutiny. The Sharman review will have many other wider issues of public audit to consider.
I do not want to rehash the arguments that have already been made at some length, but the Treasury sometimes seems inconsistent in its attitude to fraud. We hear the Government announcing that they want to clamp down on fraud—to be tough on benefit cheats and those who exploit tax loopholes. The Government have accepted Lord Grabiner's report; we have seen amendments giving the tax authorities huge additional powers to tackle the fraudsters. However, when Parliament is asking the Government to give the NAO—Parliament's watchdog—powers to investigate public fraud, the Government seem to be stepping back. They want to be tough on tax and benefit cheats, but they are not so keen to clamp down on Government cheating. What sort of message does that send out?
The Government's position is absurd as well as inconsistent. They should not, and will not, be taken seriously on fraud if they step back from this. They will have a real difficulty in winning the issue, and when it appears in the newspaper editorials, they will not stand a chance. They certainly do not deserve to.

Mr. Alan Williams: I will be brief and, I hope, not too repetitive. It is rather amusing for those of us who served on the Committee considering the Bill to think back to our early sittings, right at the beginning of the parliamentary Session, when we were suggesting amendments. We were told by the Economic Secretary and her colleagues that we must not amend the Bill because the Government needed it in a hurry. However, once it left the House of Commons, they seemed to mislay it in the House of Lords. Recently, it resurfaced, and the Bill that was so urgent that it could not be amended is being brought before the House in the week before the summer recess.
This is typical of the rather inadequate reasons that the Government have given for not accepting sensible amendments to the Bill. We have heard those reasons repeated tonight I do not know how often. I despair of the ability of some Ministers to understand anything outside their brief.
It is perfectly obvious to most people that the purpose of the Bill is as defined in the long title. Yet the mantra has been repeated again today, "It is not in the purpose of the Bill." I am surprised that you did not descend on the Minister from a great height when she said that, Mr. Deputy Speaker, because she was taking over from

you the power to decide what is permissible in the House of Commons. Perhaps she is after Madam Speaker's job—I had not thought of that before. Despite what you may say, Mr. Deputy Speaker, the Minister says that we cannot do it. It does not matter what you say, Mr. Deputy Speaker—the Minister has spoken.
The Minister's complaint is that we are dealing with audit. But as my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) asked, who brought audit into the Bill, who incorporated it into the long title and who incorporated it into clause after clause but the Government? The arguments that have been made on certain aspects of the Bill are, to my mind, fraudulent.
Now, there is Sharman. Like the right hon. Member for Haltemprice and Howden (Mr. Davis), I am participating in the review—although with no great hope or expectation—simply because we cannot afford to be accused of not participating. However, I do not believe that anyone outside this House should have the right to determine what powers it needs. It is effrontery for the Executive to tell Parliament that we should not have the right to inspect them. For those who are being monitored to say what can be monitored would be mildly comical if we saw it in a Whitehall farce—yet that is what is being proposed.
If the Minister wants to establish confidence in the Sharman exercise, will she undertake that, as it will be a House of Commons matter, it will be decided, like other such matters, on a free vote of the House? I have no doubt that, in the spirit of good will that she professes, she will be eager to give us that reassurance. If she would like to do so in an intervention, it would shorten my speech because I would sit down immediately. She should not feel inhibited or restrained. I ask her to save the House from the rest of my speech by giving us that assurance. The Minister's silence reinforces my worst suspicions and fears, although I am sure that, ultimately, they will be unjustified. However, I am twitching slightly about the Government's intentions.
At the heart of the matter—and we must constantly return to it—is whether we have a parliamentary democracy and parliamentary accountability. Access is fundamental to that—on all Government expenditure and income. If Parliament does not have that access, it cannot exercise proper control over the Executive.
Parliament cannot carry out those duties without the work of the NAO—as the present Chairman of the PAC, its previous Chairman. my right hon. Friend the Member for Ashton-under-Lyne and other members of the Committee confirm. However, the Treasury denies the NAO the rights that it needs. Those rights will be determined by the Treasury. My right hon. Friend and I suggested to Ministers that, as a halfway house solution, such matters could be dealt with on an ad hoc basis in the short term.
As the Minister is aware, I listen carefully to everything that she says. The Treasury now tells us that we must proceed case by case, but in Committee the Minister dismissed that idea. She said that we could not deal with such matters piecemeal. However, she covered her back by saying that we could not deal with them as a whole either. That left us somewhat bemused as to whether we would find a resolution in that impasse.
Such negotiation for access is inadequate for us—for Parliament; we have to go begging to a pathetic little quango that represents no one. For six months, someone's


appointee had the right to hold our auditor to account. I would have sacked the chairman and the chief executive of the Housing Corporation. They kept the NAO away from the Focus housing association. They knew that a £1.5 million fraud had been perpetrated against Focus, yet they would not let the parliamentary watchdog in.

Mr. Cash: The right hon. Gentleman makes a powerful case, as indeed did the Chairman of the PAC, my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis). The matter is the essence of parliamentary democracy and parliamentary accountability. Does the right hon. Gentleman agree that, if the Treasury is obdurate and stubborn, the remedy is to mount an organised campaign on both sides of the House? Against the Whip, the House should decide that it will insist on those measures. There should be sufficient publicity that the newspapers can add their comments.

Mr. Williams: The hon. Gentleman has been a Member of the House for a considerable time. My right hon. Friend the Member for Ashton-under-Lyne and I have been Members for even longer. It is a long time since I believed that Back Benchers were likely to stage an uprising against the power of the Whips. That happens on few occasions. The patronage and power of the Whips is so great that Back Benchers live in dread of them.

Mr. David Davis: I intervene again on the right hon. Gentleman—I am tempted to refer to him as my right hon. Friend—to prevent him from travelling further into error. Before the previous intervention, he mentioned the prospect of sacking the chairman of the Housing Corporation. He could not, of course, have sacked the permanent secretary at the then Department of the Environment—Mr. Andrew Turnbull, who is now a permanent secretary at the Treasury.

Mr. Williams: We all know of the right hon. Gentleman's devotion to the cause of the PAC. I will not venture further on the point because we should not comment on civil servants who cannot speak in this place.
There is so much nonsense behind the defences that have been made. I do not know whether Lord McIntosh of Haringey, the Minister who replied to the debate in the House of Lords, was badly briefed or whether he does not understand this place. He has never been a Member of this place, so he may not understand the processes of democratic accountability. He said:
The C&AG has inspection rights in respect of all non-departmental public bodies…the access needed to investigate and to report to Parliament on irregularity or impropriety…Most importantly—
this point was touched on by the Chairman of the PAC—
he has the right to carry out value-for-money studies at all of these bodies…the most important form of parliamentary control.—[Official Report, House of Lords, 12 July 2000; Vol. 615, c. 240-41.]
I have never heard such a constitutional absurdity. It must have been in my noble Friend's brief because he could not have been daft enough to think it up himself. As he pointed out in another part of his speech, there are more than 200 executive NDPBs and they are only a third of all NDPBs. The NAO produces 50 reports a year. Does anyone seriously suggest that the most important control by Parliament is a value-for-money study? The NAO

deals with individual aspects of the actions of individual organisations. If the NAO does not have the fundamental right of access where required, we neuter its role.
I do not want to delay hon. Members, because I realise that we shall not receive a reasonable response to our arguments. I merely want to record that this is far more than a debate about auditing, it is about the power of Parliament against the Executive. In this Bill, the Executive are winning.

Mr. Brooke: I shall be extremely brief in this, my first contribution to the entire proceedings on the Bill. My only qualification for making a contribution at this late stage is that I hold a masters degree in business administration. During Parliament's 735 years, only two MBAs have sat in a Cabinet. After the speech of my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), I am confident—as I have been before, but it is confirmed this evening—that he will unquestionably be the third.
This debate is part of a great roll of parliamentary history, a fact that has been alluded to by several speakers in the debate. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to the National Audit Act 1983, and that falls into the roll-call of legislation from 1866, 1921 and 1957.
Another event occurred in 1983. It was on the Monday of holy week when the then Prime Minister dined out the then permanent secretary to the Treasury and asked him over dinner whether he had any regrets. He said, "Prime Minister, if you had not asked me, I would not have dreamed of referring to any regret at all. But I do have a single regret. In all my time in the Treasury, the Board of the Treasury has never met." The Prime Minister asked for further information and learned that the board's own roll-call had been in 1677, 1827, 1856 and 1919. By the end of the meal she said, "I agree that the Board of the Treasury has not met since 1919, but it will meet before you cease to be permanent secretary." Before the election, on Maundy Thursday of holy week in 1983, the board met.
This is a great event. The fact that only 20 of us have gathered in the Chamber to take part in this debate makes the point, in a sense. If this were a lesser event in this great Parliament's history, no doubt the place would be crowded. There are only a limited number of people who take the closest possible interest in this issue, and I shall not go over all the points that my right hon. Friend the Member for Haltemprice and Howden made so admirably. Those who were not in the Chamber when he made them missed a considerable parliamentary contribution.
I listened closely to the Economic Secretary defending the Government's position on the ground that it was fundamentally founded on the Sharman review, and I heard my right hon. Friend say that if he had believed that the review was going to be used in that way, he would not have been prepared to serve on it. It is an absolute Exocet to the Government's position if the Chairman of the Public Accounts Committee was put on the review body under what must be regarded as a slightly false premise.
My judgment is that of a visitor to the debate who has taken part only at its end. The London business school has been in existence for 36 years, and it is regarded as the best business school in the world outside the United


States; many American business schools go back 100 years. At all stages of the Bill's proceedings, it has been worth making the case for the London business school to examine this issue. It is a classic instance showing where the role of Government should be played out in terms of the relationship between the Executive and Parliament.
Many in the House will have listened to people reading out football results, and there is a particular tone of voice in which a result is read out, to suggest in advance that it was a draw. On the basis of what I have heard this evening, it is Haltemprice and Howden 4, Welwyn Hatfield 0. I appreciate that there will be a return match, but at the moment the Government are a long way behind.

Mr. Sheldon: As always, I was much entertained by the right hon. Member for Cities of London and Westminster (Mr. Brooke). He is right to draw attention to the House's original intention to have some control over the expenditure of public money. The right to audit Government effectively was supposed to have been settled a long time ago—back in 1861 when Gladstone set up the Public Accounts Committee. The Exchequer" and Audit Departments Act 1866, which established the Comptroller and Auditor General, followed on from that.
The purpose of that legislation was to audit, through the CAG, all the money examined by the Parliament. The long title of the 1886 Act noted that its purpose was to
regulate the Receipt, Custody and Issue of Public Moneys and to provide for the audit thereof.
There were no exceptions to that; it covered the lot.
As my great friend John Garrett has shown in his great work, over the years the Treasury hijacked the rights of the House of Commons. Therefore the return match, as the right hon. Gentleman called it, was brought back into focus, and the result was the National Audit Act 1983. That was essential, to re-establish control by the House.
Access by the CAG should be the result of a right, and should not involve permission. He should not have to seek the permission of the people whom he is auditing; he should have an unqualified right of access—and I should not have to ask for that.
In 1983, the argument for the need to follow public money wherever it went was put strongly. However, I understand the anxieties expressed by some people at that time, because the National Audit Office was untried and did not have a record of achievement; it had only just been set up. However, it now has 17 years' experience, and we have seen its work and that of the CAG. The NAO constantly produces splendid reports, and 50 value-for-money reports have been published, so its reputation has never been higher. Given that fact, one might have expected the Treasury to be a little more relaxed about such matters and accept the next stage in the process, which would have been to re-establish what had been decided 140 years ago.
It is sad that the Treasury reacted in such a fashion. The opportunity to consider this issue is not likely to recur for another 20 or 30 years, or even more—it is only because of the Bill that we have had the opportunity to consider it now. This is the only chance that we have to resolve the problem. I am sure that the Sharman review is splendid and will provide a fair amount of information,

but it will not make the decisions. Only the House can make such decisions, and I think that we have missed a great opportunity.

Mr. David Rendel: We are debating an unusual issue. I begin where the right hon. Member for Swansea, West (Mr. Williams) left off when, in a powerful speech, he made the point that this is a matter between Parliament and the Executive. It is not the normal type of party political issue that we spend so much time debating in the House, usually fairly uselessly.
Parliament is on one side and the Executive are on the other. That is so much so, that before we came into the Chamber, I thought that we might find a string of those whose names have been loosely or closely associated with the forthcoming vacancy for Speaker speaking on behalf of Parliament, so as to demonstrate the strength of their feelings about the need for Parliament to control the Executive. I was therefore somewhat surprised to hear the right hon. Member for Cities of London and Westminster (Mr. Brooke) speak. I thought that it might be a comeback attempt on his behalf, but perhaps that is not the case.

Mrs. Gwyneth Dunwoody: I am afraid that some of us made the mistake of coming in to listen to the debate. Of course that is always a problem in the House of Commons, because some of us are frequently persuaded that we might have to protect Parliament, even if we do so silently.

Mr. Rendel: I am delighted to hear what is perhaps a hint of what we may see in the Division Lobby shortly.
I am the third member of the Public Accounts Committee to speak in the debate, and this is one of the rare issues on which there is, at least in the Committee, complete cross-party agreement on what should be done. I hope that Parliament will pay attention to the fact that the Public Accounts Committee is united and determined on this issue. After all, those of us who are members of the PAC are the watchdogs of Parliament's rights over the Executive. I hope that hon. Members who are not members of the PAC will pay attention to the fact that there are such strong feelings about the issue, which are an important pointer to their best interests, as well as ours.
It is extraordinary that the Government are taking the line that they have taken—not least because to quite a large extent they seem to understand the importance of giving the National Audit Office the right of access to areas to which it might not previously have had access. That point has been made before, but the Government deserve to have it made again. The previous Government set up many non-departmental public bodies without giving the NAO proper access. On the whole, the present Government have behaved very properly and provided the NAO with access when a new NDPB is set up.
It is therefore a particular surprise that the Government are taking the line that they appear to be taking tonight. A point that has been made already, but which needs to be emphasised, is the fact that it is important for the Government themselves that the NAO should be in a position to look into all Government accounts. There is nothing worse for a Government than discovering a long way down the track how poorly their money has been spent. First, the later they discover that the more embarrassing it is for them, and secondly, by that time


that much more money—which the Executive could have spent on a vote-catching idea that might have brought them greater popularity—has been wasted. It must therefore be in the Government's best interests not to take a short-term view, but to consider the longer-term interests that would be served by giving the NAO full access to all accounts.
Finally, I wish to make a point about the Economic Secretary's arguments. She seemed to think that the NAO was in danger of acting in grossly irresponsible way and, if given the sort of powers that we are discussing, suddenly wishing to pry into every individual's financial affairs. She seemed to think that it might act as it has not acted so far, just for the hell of it, or just because it was interested in Mr. Bloggs' personal finances. Frankly, I do not think that the NAO has ever acted in that way, and the Economic Secretary's idea that it would act in an overburden some way towards small business means that she apparently thinks that if it were given such powers, its future behaviour would be totally unlike its behaviour in the past. She should not have made that assumption, because it is not realistic, and I hope that she will withdraw it when she winds up.

Mr. Cash: There is no need for me to make a long speech at this stage. The arguments have been presented well by some speakers who are extremely distinguished in this House. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), a former chairman of the PAC, is in alliance with my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), its current chairman, and other PAC members have weighed in as well.
As a member of the House's other main Scrutiny Committee—the Select Committee on European Scrutiny—I am conscious of the fact that it is essential that Scrutiny Committees are listened to. If the juggernaut of Government can steamroller over the views of Scrutiny Committees—which is, in effect, what is happening today—one is bound to ask what on earth is going on. I do not need to go into the intricacies of the argument that has already been deployed. I think I am right in saying that the right hon. Member for Swansea, West (Mr. Williams) is the Chairman of the Select Committee on Liaison—[Interruption.] Apparently, he is not. None the less, the Liaison Committee recently produced an important report on the Whips' power, and on whether they should have their present degree of control over Committees.

Mr. Deputy Speaker: Order. We have an amendment before us. We must address our remarks to it and not go so wide as to discuss other Committees and the powers of the Whips.

Mr. Cash: I accept your guidance with pleasure, Mr. Deputy Speaker. In a nutshell, the matter before us raises a question that is at the heart of our democratic system and the system of accountability. It is easy for people to make grandiose statements and then, somehow or other, for their remarks to float on the wind. The reality is that this matter raises such questions, and it is inconceivable that the amendment should not be accepted.

I wait with interest to see how the Economic Secretary will handle herself, because, quite frankly, she is on the rack.

Mr. Flight: I just want to make the point that the Bill sets up Partnerships UK, with the intention of expanding considerably the private finance initiative activities in public-private partnerships. I hope that those partnerships are successful, as they are frequently the most efficient way of delivering to the public services that are now the duty of the Government. If, over the next decade, many areas of public service are to be handled on a mixed public-private basis, it is fundamental that Parliament have the power to follow by audit the money involved. It is a new, changed territory, to which, as matters currently stand, access for audit is strictly limited.
Our debate on Lords amendments does not touch on the PFI part of the Bill. However, if the Bill is passed without the National Audit Office having the ability to prod and examine in great depth what happens in public-private partnerships, Parliament will have surrendered a crucially important power.

Mr. Letwin: Our debate comes at the end of a long sequence of debates on this subject. On an earlier occasion, I was teased rather amiably by the right hon. Member for Swansea, West (Mr. Williams) for having contributed at too great a length to a previous debate. However, it is inconceivable that we can make the accusation that tonight's debate is too wordy—at least until I begin.
We heard powerful contributions from my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the right hon. Members for Swansea, West and for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Newbury (Mr. Rendel)—perhaps the four most notable members, past and present, of the Public Accounts Committee who are still Members of the House. We heard also from my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke), whose absence from our proceedings we regret. We would have liked to have heard from him endlessly on this subject. We even called forth from the depths my hon. Friend the Member for Stone (Mr. Cash), who felt compelled to come to the House, and we had a silent contribution from the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), whom some of us hope to see in another position on another occasion. We find that there is cross-party agreement.
Why is all this happening? The Economic Secretary eloquently read out yet another of the splendidly mellifluous briefs that she has been given throughout the proceedings. Why, following that, do we hear a universal chorus echoing the word "no" around the Chamber? It is because, I regret to say, the mellifluous prose read out by the Economic Secretary lacks logic, as it has on previous occasions. It also, alas, contradicts the tradition and spirit of our parliamentary democracy. Those two lacunae give rise to frustration in the House.
I shall take head on three arguments at the centre of the Economic Secretary's rhetoric. The first relates to drafting. As other contributors have said, that argument is the last refuge of the Sir Humphrey figure in Whitehall. It is being made after months of investigation in which repeated amendments and offers of redrafting of amendments have been put forward. The hon. Member for


Kingston and Surbiton (Mr. Davey), the right hon. Member for Swansea, West and I—and, for all I know, my right hon. Friend the Member for Haltemprice and Howden—have produced four, if not five, variants of these amendments. In addition, the House of Lords has made its own amendments.
At each of those stages the combined might of the intellects in the Treasury, including the Treasury Solicitor, and of parliamentary draftsmen could, surely to goodness, have been brought to bear on the deficiencies about which the Economic Secretary waxed lyrical. This is not a drafting problem. Drafting is the not particularly adequate shield behind which the Economic Secretary seeks to hide from the slings and arrows of argument.
The Economic Secretary's major argument concerns intrusion. Ministers have been making this argument from the beginning of the debate. I understand the essence of the argument and it is not without merit, until one pursues it to its conclusion. Ministers argue that it would be horribly intrusive for the private sector to have the NAO coming down on it because that would be an unpremeditated additional audit and a huge regulatory burden. The hon. Member for Newbury and my right hon. Friend the Member for Haltemprice and Howden pointed out that it is unlikely that a body as small as the NAO could be highly intrusive in auditing the many thousands of recipients of public funds the length and breadth of Britain.
My right hon. Friend also pointed out that at an early stage he and his colleagues on the PAC conceded the principle that the access should reach only as far as the Government themselves seek to reach. I, personally, regret that concession because it may restrict the scope of the NAO's activities. I do not know whether this point has penetrated the ministerial or official mind, and it has never been reflected in any statement that Ministers have made to the House, but this is a killer concession for their argument.
It cannot be held by the Government that the Government are too intrusive, because the Government could do something about that; they could restrict their own access. Nor can the Government logically argue that if they have a right and, I suppose, therefore, a duty to inspect the accounts of various bodies, Parliament should not be concerned with them. That is to suggest that the scope of Parliament is intrinsically inferior to, and more reduced than that of the Government, and even in the wildest imaginings of the Leader of the House the Government could not conceivably espouse that constitutional doctrine. The intrusion argument is another shield behind which Ministers seek to hide from the slings and arrows of the House.
I turn now to the real point, which is that the Treasury wants to keep the initiative. It wants to continue to be able to decide where the PAC, the NAO and the Comptroller and Auditor General will have access and where they will not. It wants to take advice from Lord Sharman and other quarters, but in the end it wants to decide access. The Executive want to decide which parts of the Executive are open to inspection and which are not. That is the purpose of the Government's amendment in lieu, and it has been their signal purpose throughout these debates.
It is not right for the Executive to decide how far the Executive should be open to inspection any more than it would be right for any of us to decide how far we should be open to inspection by the courts or the police. These matters have to be decided by law, and not by administrative Acts of the Treasury. That is a point on which every speaker in the debate is unified, bar the Economic Secretary.
I make that point specifically to put it on record for their lordships, to affirm their decision, which I hope they will make in a few days, to send this amendment back to this House. I hope that they will send it back again and again, if necessary, until at last the Government concede the point, or see fit to use the Parliament Acts to defeat Parliament—an irony that will not escape the media or the nation—or the Lords triumph. I hope that we will find that the Lords, ironically, defend Parliament against the Executive.

Mr. Cash: Is my hon. Friend inclined to adopt the view that I expressed in a previous intervention? It is indeed incongruous that we should need to use the appointed Lords to achieve an important principle, namely, the preservation of accountability and democracy. Therefore, in the light of the clear cross-party consensus expressed by extremely distinguished members of the Public Accounts Committee, should not Government Backbenchers be encouraged to defy the whip?

Mr. Letwin: New as I am to Parliament, I share the scepticism that has been expressed by the right hon. Member for Swansea, West.
It is a sad state of affairs that, in such an important matter, because of the power of the Whips, the House of Commons has to rely on another body—one that is not so subject to the Executive—to defend its privileges. Does that not prove that we need to be extremely cautious about allowing the Executive to exercise the very powers that they seek to re-obtain through their amendment in lieu?

Miss Melanie Johnson: I shall start with a couple of general points, the first of which is that I do not seek to reduce the powers of Parliament in any way. In respect of the issues raised in the debate, especially by the right hon. Member for Haltemprice and Howden (Mr. Davis), my desire and that of the Government is to ensure that the right sort of accountability, probity and financial properness is found in the affairs of Government, and that the Public Accounts Committee is able to carry out its job with the full support of the National Audit Office.
Many of the hon. Members who have contributed to the debate have emphasised some difference between the Government and the House, but it is important to note that, as often happens, only those who disagree with the Government have spoken. They are entirely within their rights to make their points—

Mr. Brooke: Will the Economic Secretary give way?

Miss Johnson: I am trying to develop a general argument, but I shall give way on this occasion.

Mr. Brooke: Does the hon. Lady agree that it is a noticeable feature of the debate that nobody other than herself has spoken for the Government's point of view?

Miss Johnson: I am sure that I do not have to tell the right hon. Gentleman that the picture painted this evening


is not an unusual one: it is often those who want to disagree with the Government who come to the Chamber to express their views, whereas those who agree are silent.
The debate has run together three main issues to an extent that the resulting elision is unacceptable. The first issue is access for audit purposes by the Comptroller and Auditor General, which provided the focus of debates during previous stages of the Bill's passage. I draw the attention of the right hon. Member for Haltemprice and Howden to his description of the problems arising from the Bill. Without dwelling on the difficulties that he explored at some length on 1 March on Report, I simply point out that he repeatedly mentioned the CAG's access rights. That was much of the focus of his comments. That issue is different from some of the others that have been raised.
My right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) raised the question of value-for-money audit, which is different. Indeed, I made that point—although not in any way to usurp the rights of the Speaker. The Speaker and Deputy Speakers will always decide, quite rightly, which matters a Bill covers. Issues on access for value-for-money studies were discussed fully during the passage of the National Audit Act 1983, but have not been the subject of debates on this Bill. In fact, it has been agreed until now that the issues surrounding clause 8 concern access needed for audit of departmental accounts alone. Issues concerning access for value-for-money studies will be considered by Lord Sharman during the review.
I turn to the points made about inadequate drafting. The scepticism of the hon. Member for West Dorset (Mr. Letwin) about whether something could easily be done was unhelpful. Several attempts—unsuccessful ones—have been made to draft an amendment to define a non-departmental public body, which illustrates just how difficult it is, as I said. NDPBs form a wide and disparate group. The most sensible way in which to deal with the issue would therefore be to designate them by order, as proposed in the Government's amendments to the Lords amendments.

9 pm

Mr. Letwin: Although I appreciate the Economic Secretary giving way and the delicious irony of her idea that designating by order is justified by the difficulty of defining it in statute, which could have a far wider application, did she allow parliamentary draftsmen and the Government's legal advisers to assist those seeking to achieve this end to improve the drafting of their amendments at any stage during the passage of the Bill?

Miss Johnson: I am not aware of the contact between parliamentary draftsmen and any Opposition Member, although such contact does not normally go on. I am not aware of any approaches to the Treasury seeking direct engagement on the point, but I reiterate that the task is and has been difficult, and no one has proposed a workable definition. That is the point at issue.

Mr. David Heath: Will the hon. Lady give way?

Miss Johnson: The hon. Gentleman has only just arrived and has not been present during the debate to

make any point or hear any of it. Therefore, I shall give way to other hon. Members, but shall develop my argument a little before I do so.
There are three issues. One is access for audit purposes. Secondly and separately, there is value for money. There is a third point about investigation of fraud, which is also entirely different and separate and not directly bound up with the question of access for audit purposes. The matters have been run together in many speeches, which has not helped the clarity of this evening's debate.
The Government of course have a role as a regulator and investigator, but, properly, we do not want to give the NAO an automatic right to similar access, thereby duplicating regulation and investigation. There must be a mechanism to achieve balance, as the Government amendment seeks to do.
On the relationship between business and regulation, I refer to an article in Accountancy Age on 27 January this year, which was headed:
Business backlash over plans to give NAO powers of access.
The article states:
Business has reacted with deep reservation at proposals to allow the NAO to audit firms and companies handling the working families tax credit.
The issue involves red tape and balance. The hon. Member for Newbury (Mr. Rendel) said that in the past, that had caused no difficulty. However, suspicion and concern exist about what might happen if the power to make decisions were given without constraint. In the same way, there may be concern about what access the NAO may have and what it may do in future.
At present, the NAO has access to the private sector by agreement. That makes it possible to ensure that the NAO achieves a balance between its access demands and the need to keep burdens to the minimum necessary. The Lords amendment would remove the need for the NAO to agree and thus to balance its demands against the legitimate concerns of business.

Mr. Letwin: I am doubly grateful to the Economic Secretary for giving way. Will she tell us whether the argument applies generally? If the Government were hypothetically to conduct their entire activities through NDPBs and the private sector in PPPs, would she argue that the Comptroller and Auditor General should have access to nothing?

Miss Johnson: The hon. Gentleman forgets, and I was disappointed that in their contributions other hon. Members did not mention, that we have given much wider access than existed before, through the changes that we have made, not only by dealing with issues such as Camelot, which was not dealt with by the previous Government, but in clause 8(2)(b), which was added to the Bill on Report—[Interruption.]

Mr. Deputy Speaker: Order. There are so many conversations going on in the Chamber that it is unfair to the hon. Lady who is replying to the debate.

Miss Johnson: Thank you, Mr. Deputy Speaker. Clause 8(2)(b) provides the Comptroller and Auditor General with a new statutory right of access in the cases covered by the clause. In some ways that access goes beyond the Government's right of access. That answers


the hon. Member for West Dorset, who asked why the Comptroller and Auditor General should not have access, if the Government have access. I have given an example in which the CAG's right of access goes beyond that of Government Departments, a point that is not generally recognised.

Mr. Rendel: I am grateful to the hon. Lady for giving way. She mentioned an argument that I made a few moments ago, and claimed that there would be some concern, presumably on the part of business, if the Comptroller and Auditor General were given the increased powers that the amendment seeks. Is she saying that she would be worried that those powers might be abused, or is she saying that businesses may be worried, but that in practice that worry would be unnecessary because, in her view, the Auditor General would not abuse those powers?

Miss Johnson: I wish I had a crystal ball. I am sure that all right hon. and hon. Members would agree that a crystal ball would be very handy. I do not have one, nor does anyone else in the Chamber. Therefore none of us can say for certain how an unfettered power could be used by a future body. I am not saying that the power would be used in the way suggested, or that it would necessarily cause difficulties, but none of us can say how it would be used.
Clause 23 provides the same access to the Comptroller and Auditor General's audits of the accounts of non-departmental public bodies as clause 8 provides for his audit of departmental accounts. Clause 23 therefore provides a new power for him to be made auditor of those non-departmental public bodies, which he is prevented from auditing by current statute. That was done to tackle the many points that hon. Members made in their discussions on access. It is relevant to the debates that we have held over a long period about making right of access easier.
The right hon. Member for Haltemprice and Howden mentioned today's National Audit Office report on Focus housing association. His comments go to the heart of the third aspect that I want to consider: the investigation of fraud. The Comptroller and Auditor General will not normally be the identifier because the external auditor of accounts would not be the usual, prime means of identifying fraud, which is primarily identified—

Mr. David Davis: rose—

Miss Johnson: I shall finish my sentence before giving way to the right hon. Gentleman. Fraud is primarily identified by internal audit, whistleblowing, police serious fraud office activity as well as ordinary management controls, regulation and regulators' activities. All those matters are not the responsibility of the Comptroller and Auditor General.

Mr. Davis: Many of the Economic Secretary's comments have been wrong. However, her current remarks are the most outrageous. First, the Government's whistleblowers' measure names the Comptroller and Auditor General as an appropriate recipient of

whistleblowers' information. Secondly, she is currently considering a case in which the information came from a whistleblower and the regulatory body failed to follow it up. Thirdly, she should read some National Audit Office reports. Fraud has featured in at least three in the past year. I refer her specifically to the report on further education colleges and the weaknesses of the external and internal auditors.

Miss Johnson: It is for all internal and external auditors to identify fraud. I agree with the right hon. Gentleman's comments about the failure of the regulator; I was about to make the same point. It is the reason for the conclusions to today's National Audit Office report, which states that regulators should be concerned not only with the existence of internal controls in the bodies that they regulate, but with their continued operation. The report condemns the Housing Corporation for the laxity of its regulatory grip. That is right and proper. However, it is not the Comptroller and Auditor General's role to be the regulator. The regulator is the Housing Corporation. It has apparently done its job badly. That is a valid point, but it does not relate to the extension of the powers of the Comptroller and Auditor General.

Mr. Alan Williams: Does my hon. Friend acknowledge that when the regulator, as she calls it—in this case, the Housing Corporation—fails to do its duty, it is absurd that the auditor for this House has to ask permission of that regulator before, as the report states, it has the right to examine "impropriety or irregularity"? It must negotiate with the failed regulator to do the regulator's job.

Miss Johnson: I do not believe that my right hon. Friend made an accurate summary of what happened. As I understand it, the relevant fraud took place between 1991 and 1995. The NAO undertook an initial study in the autumn of 1996 on the basis of documents held by the Housing Corporation. It did not identify the fraud because, as the right hon. Member for Haltemprice and Howden said, it had already been identified. The NAO undertook the study in autumn 1996 on the basis of documents held by the Housing Corporation, which regulates the housing associations, and had taken action against Focus.
At no point in the initial study did the NAO request access directly to Focus housing association. Indeed, it specifically stated that it would not seek such access. The NAO only requested access to Focus in September 1997, and access was agreed by February 1998. In a sense, not too much should hang on a particular example, and that is but one example, and the point is that it is about the identification of fraud, not about the prime role of the Comptroller and Auditor General—[Interruption.]

Mr. Deputy Speaker: Once again, there are too many conversations in the Chamber. That is unfair; the Economic Secretary is responding to the debate and she should be heard.

Miss Johnson: Thank you, Mr. Deputy Speaker.
The CAG's prime role is not to seek out and identify fraud, even where the CAG carries out the audit. For example, there was extensive fraud in the Metropolitan police and the CAG was the auditor, but the fraud was


not identified as a result of that activity. In no way do I criticise the NAO or the CAG for that failure because the prime role of external auditors is not to identify fraud. As have I said, such matters are dealt with in many ways. In that case, one of the prime roles, which has clearly failed, is that of the regulator. That involves a different set of issues from those before this evening.
To summarise—[Interruption.] The right hon. and hon. Gentlemen who have just cheered clearly did not hear their hon. Friends argue that the primacy of Parliament over the Executive is at stake. Clearly, they are in a great hurry to reach a conclusion.
We have done much to meet the future needs of access required by the CAG. The Sharman review will provide a further opportunity fully to consider such matters. It must be remembered that the order-making power will be exercised only after consulting the CAG and that it will be subject to the affirmative procedure in both Houses of Parliament. The order-making power that we propose represents a pragmatic response to extending the CAG's rights in the knowledge of the setting up of the Sharman review.
For the reasons that I have given, the issues that have been raised about value for money are new to the Bill's consideration, which has been extensive and taken place on many evenings in Committee and in another place as well as in the Chamber. The question of fraud is outwith that consideration. We are keen that fraud should be tackled and dealt with. No Government could have any other interest than ensuring that fraud is reduced to an absolute minimum and discovered as quickly as possible, but that is not the issue here. Business must find the power workable; the CAG must be given appropriate access; and the Sharman review must have an input into what the House does in future under the order-making power that we propose.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 311, Noes 158.

Division No. 282]
[9.19 pm

AYES


Abbott, Ms Diane
Blizzard, Bob


Adams, Mrs Irene (Paisley N)
Borrow, David


Ainger, Nick
Bradley, Keith (Withington)


Ainsworth, Robert (Cov'try NE)
Bradley, Peter (The Wrekin)


Alexander, Douglas
Bradshaw, Ben


Allen, Graham
Brinton, Mrs Helen


Anderson, Donald (Swansea E)
Brown, Rt Hon Gordon(Dunfermline E)


Armstrong, Rt Hon Ms Hilary



Ashton, Joe
Brown, Rt Hon Nick (Newcastle E)


Atherton, Ms Candy
Brown, Russell (Dumfries)


Atkins, Charlotte
Burden, Richard


Banks, Tony
Burgon, Colin


Barnes, Harry
Butler, Mrs Christine


Barron, Kevin
Caborn, Rt Hon Richard


Bayley, Hugh
Campbell, Mrs Anne (C'bridge)


Beard, Nigel
Campbell, Ronnie (Blyth V)


Beckett, Rt Hon Mrs Margaret
Campbell-Savours, Dale


Begg, Miss Anne
Cann, Jamie


Bell, Stuart (Middlesbrough)
Caplin, Ivor


Benn, Hilary (Leeds C)
Casale, Roger


Benn, Rt Hon Tony (Chesterfield)
Caton, Martin


Benton, Joe
Cawsey, Ian


Bermingham, Gerald
Chapman, Ben (Wirral S)


Berry, Roger
Chaytor, David


Best, Harold
Chisholm, Malcolm


Blears, Ms Hazel
Clapham, Michael





Clark, Rt Hon Dr David (S Shields)
Healey, John


Clark, Paul (Gillingham)
Henderson, Ivan (Harwich)


Clarke, Charles (Norwich S)
Hepburn, Stephen


Clarke, Eric (Midlothian)
Heppell, John


Clarke, Rt Hon Tom (Coatbridge)
Hesford, Stephen


Clarke, Tony (Northampton S)
Hill, Keith


Clelland, David
Hinchliffe, David


Clwyd, Ann
Home Robertson, John


Coaker, Vernon
Hope, Phil


Coffey, Ms Ann
Hopkins, Kelvin


Cohen, Harry
Howarth, Alan (Newport E)


Connarty, Michael
Howarth, George (Knowsley N)


Cook, Frank (Stockton N)
Howells, Dr Kim


Cooper, Yvette
Hoyle, Lindsay


Corbett, Robin
Hughes, Ms Beverley (Stretford)


Corbyn, Jeremy
Hughes, Kevin (Doncaster N)


Corston, Jean
Humble, Mrs Joan


Cranston, Ross
Hurst, Alan


Crausby, David
Hutton, John


Cryer, Mrs Ann (Keighley)
Iddon, Dr Brian


Cryer, John (Hornchurch)
Illsley, Eric


Cummings, John
Jackson, Helen (Hillsborough)


Cunningham, Jim (Cov'try S)
Jamieson, David


Curtis-Thomas, Mrs Claire
Jenkins, Brian


Dalyell, Tam
Johnson, Alan (Hull W & Hessle)


Darling, Rt Hon Alistair
Johnson, Miss Melanie(Welwyn Hatfield)


Darvill, Keith



Davey, Valerie (Bristol W)
Jones, Rt Hon Barry (Alyn)


Davies, Rt Hon Denzil (Llanelli)
Jones, Mrs Fiona (Newark)


Davies, Geraint (Croydon C)
Jones, Helen (Warrington N)


Davis, Rt Hon Terry(B'ham Hodge H)
Jones, Ms Jenny(Wolverh'ton SW)


Dawson, Hilton
Jones, Jon Owen (Cardiff C)


Dean, Mrs Janet
Jones, Dr Lynne (Selly Oak)


Denham, John
Jones, Martyn (Clwyd S)


Dismore, Andrew
Jowell, Rt Hon Ms Tessa


Dobbin, Jim
Keeble, Ms Sally


Dobson, Rt Hon Frank
Keen, Alan (Feltham & Heston)


Donohoe, Brian H
Keen, Ann (Brentford & Isleworth)


Doran, Frank
Kennedy, Jane (Wavertree)


Dowd, Jim
Khabra, Piara S


Drew, David
Kidney, David


Eagle, Angela (Wallasey)
Kilfoyle, Peter


Eagle, Maria (L'pool Garston)
Kumar, Dr Ashok


Edwards, Huw
Ladyman, Dr Stephen


Efford, Clive
Lawrence, Mrs Jackie


Ellman, Mrs Louise
Laxton, Bob


Ennis, Jeff
Lepper, David


Field, Rt Hon Frank
Leslie, Christopher


Fisher, Mark
Levitt, Tom


Fitzpatrick, Jim
Lewis, Ivan (Bury S)


Fitzsimons, Mrs Lorna
Lewis, Terry (Worsley)


Flint, Caroline
Lloyd, Tony (Manchester C)


Foster, Rt Hon Derek
Lock, David


Foster, Michael Jabez (Hastings)
Love, Andrew


Foster, Michael J (Worcester)
McAllion, John


Fyfe, Maria
McAvoy, Thomas


Gardiner, Barry
McCabe, Steve


George, Bruce (Walsall S)
McCafferty, Ms Chris


Gerrard, Neil
McDonagh, Siobhain


Gibson, Dr Ian
Macdonald, Calum


Godman, Dr Norman A
McDonnell, John


Godsiff, Roger
McGuire, Mrs Anne


Goggins, Paul
McIsaac, Shona


Golding, Mrs Llin
McKenna, Mrs Rosemary


Gordon, Mrs Eileen
Mackinlay, Andrew


Griffiths, Jane (Reading E)
McNamara, Kevin


Griffiths, Win (Bridgend)
McNulty, Tony


Grocott, Bruce
MacShane, Denis


Gunnell, John
McWalter, Tony


Hall, Mike (Weaver Vale)
McWilliam, John


Hail, Patrick (Bedford)
Mahon, Mrs Alice


Hamilton, Fabian (Leeds NE)
Mallaber, Judy


Hanson, David
Marsden, Gordon (Blackpool S)


Harman, Rt Hon Ms Harriet
Marshall, David (Shettleston)


Heal, Mrs Sylvia
Marshall, Jim (Leicester S)






Marshall-Andrews, Robert
Sedgemore, Brian


Maxton, John
Shaw, Jonathan


Meacher, Rt Hon Michael
Sheerman, Barry


Meale, Alan
Short, Rt Hon Clare


Merron, Gillian
Simpson, Alan (Nottingham S)


Michael, Rt Hon Alun
Skinner, Dennis


Michie, Bill (Shef'ld Heeley)
Smith, Rt Hon Andrew (Oxford E)


Miller, Andrew
Smith, Angela (Basildon)


Moffatt, Laura
Smith, Miss Geraldine (Morecambe & Lunesdale)


Moonie, Dr Lewis



Morgan, Ms Julie (Cardiff N)
Smith, Jacqui (Redditch)


Morley, Elliot
Smith, John (Glamorgan)


Morris, Rt Hon Ms Estelle(B'ham Yardley)
Smith, Llew (Blaenau Gwent)



Southworth, Ms Helen


Morris, Rt Hon Sir John (Aberavon)
Squire, Ms Rachel



Starkey, Dr Phyllis


Mountford, Kali
Steinberg, Gerry


Mudie, George
Stevenson, George


Mullin, Chris
Stewart, David (Inverness E)


Murphy, Jim (Eastwood)
Stewart, Ian (Eccles)


Naysmith, Dr Doug
Stoate, Dr Howard


Norris, Dan
Strang, Rt Hon Dr Gavin


O'Brien, Bill (Normanton)
Stringer, Graham


O'Hara, Eddie
Stuart, Ms Gisela


Olner, Bill
Sutcliffe, Gerry


Osborne, Ms Sandra
Taylor, Rt Hon Mrs Ann (Dewsbury)


Pearson, Ian



Perham, Ms Linda
Taylor, David (NW Leics)


Pickthall, Cohn
Temple-Morris, Peter


Plaskitt, James
Thomas, Gareth R (Harrow W)


Pollard, Kerry
Timms, Stephen


Pond, Chris
Tipping, Paddy


Pound, Stephen
Todd, Mark


Powell, Sir Raymond
Truswell, Paul


Prentice, Ms Bridget (Lewisham E)
Turner, Dennis (Wolverh'ton SE)


Prentice, Gordon (Pendle)
Turner, Neil (Wigan)


Primarolo, Dawn
Twigg, Stephen (Enfield)


Prosser, Gwyn
Tynan, Bill


Purchase, Ken
Vis, Dr Rudi


Quin, Rt Hon Ms Joyce
Walley, Ms Joan


Quinn, Lawrie
Ward, Ms Claire


Radice, Rt Hon Giles
Wareing, Robert N


Rammell, Bill
Watts, David


Rapson, Syd
White, Brian


Raynsford, Nick
Whitehead, Dr Alan


Reed, Andrew (Loughborough)
Wicks, Malcolm



Williams, Alan W (E Carmarthen)


Reid, Rt Hon Dr John (Hamilton N)
Williams, Mrs Betty (Conwy)


Roche, Mrs Barbara
Wills, Michael


Rooney, Terry
Winnick, David


Ross, Ernie (Dundee W)
Winterton, Ms Rosie (Doncaster C)


Rowlands, Ted
Woolas, Phil


Roy, Frank
Worthington, Tony


Ruane, Chris
Wray, James


Ruddock, Joan
Wright, Anthony D (Gt Yarmouth)


Russell, Ms Christine (Chester)
Wyatt, Derek


Ryan, Ms Joan



Salter, Martin
Tellers for the Ayes:


Sarwar, Mohammad
Mr. Don Touhig and


Savidge, Malcolm
Mr. Clive Betts.



NOES


Ainsworth, Peter (E Surrey)
Brady, Graham


Allan, Richard
Brake, Tom


Amess, David
Brand, Dr Peter


Arbuthnot, Rt Hon James
Brazier, Julian


Baldry, Tony
Brooke, Rt Hon Peter


Ballard, Jackie
Browing, Mrs Angela


Beth, Rt Hon A J
Bruce, Ian (S Dorset)


Bell, Martin (Tatton)
Burnett, John


Bercow, John
Burns, Simon


Beresford, Sir Paul
Cash, William


Blunt, Crispin
Chapman, Sir Sydney(Chipping Barnet)


Boswell, Tim



Bottomley, Peter (Worthing W)
Chope, Christopher


Bottomley, Rt Hon Mrs Virginia
Clappison, James





Clark, Dr Michael (Rayleigh)
Maclean, Rt Hon David


Collins, Tim
McLoughlin, Patrick


Cormack, Sir Patrick
Madel, Sir David


Cran, James
Malins, Humfrey


Curry, Rt Hon David
Maples, John


Davey, Edward (Kingston)
Maude, Rt Hon Francis


Davies, Quentin (Grantham)
Mawhinney, Rt Hon Sir Brian


Davis, Rt Hon David (Haltemprice)
Morgan, Alasdair (Galloway)


Day, Stephen
Nicholls, Patrick


Dorrell, Rt Hon Stephen
O'Brien, Stephen (Eddisbury)


Duncan, Alan
Öpik, Lembit


Evans, Nigel
Ottaway, Richard


Ewing, Mrs Margaret
Paice, James


Faber, David
Paterson, Owen


Fabricant, Michael
Randall, John


Fallon, Michael
Redwood, Rt Hon John


Fearn, Ronnie
Rendel, David


Flight, Howard
Robathan, Andrew


Forth, Rt Hon Eric
Robertson, Laurence


Foster, Don (Bath)
Roe, Mrs Marion (Broxbourne)


Fowler, Rt Hon Sir Norman
Rowe, Andrew (Faversham)


Fox, Dr Liam
Ruffley, David


Fraser, Christopher
Russell, Bob (Colchester)


Gale, Roger
St Aubyn, Nick


Garnier, Edward
Sanders, Adrian


George, Andrew (St Ives)
Sayeed, Jonathan


Gibb, Nick
Shephard, Rt Hon Mrs Gillian


Gillan, Mrs Cheryl
Shepherd, Richard


Gorman, Mrs Teresa
Simpson, Keith (Mid-Norfolk)


Gorrie, Donald
Smith, Sir Robert (W Ab'd'ns)


Gray, James
Spelman, Mrs Caroline


Green, Damian
Spicer, Sir Michael


Greenway, John
Spring, Richard


Grieve, Dominic
Stanley, Rt Hon Sir John


Gummer, Rt Hon John
Steen, Anthony


Hague, Rt Hon William
Stunell, Andrew


Hammond, Philip
Swayne, Desmond


Hancock, Mike
Syms, Robert


Harris, Dr Evan
Tapsell, Sir Peter


Hawkins, Nick
Taylor, Ian (Esher & Walton)


Hayes, John
Taylor, John M (Solihull)


Heald, Oliver
Taylor, Sir Teddy


Heath, David (Somerton & Frome)
Thomas, Simon (Ceredigion)



Tonge, Dr Jenny


Heathcoat-Amory, Rt Hon David
Townend, John


Hogg, Rt Hon Douglas
Tredinnick, David


Horam, John
Trend, Michael


Howard, Rt Hon Michael
Tyler, Paul


Howarth, Gerald (Aldershot)
Tyrie, Andrew


Hughes, Simon (Southwark N)
Viggers, Peter


Jackson, Robert (Wantage)
Waterson, Nigel


Jenkin, Bernard
Webb, Steve


Key, Robert
Wells, Bowen


King, Rt Hon Tom (Bridgwater)
Whitney, Sir Raymond


Kirkbride, Miss Julie
Whittingdale, John


Kirkwood, Archy
Widdecombe, Rt Hon Miss Ann


Laing, Mrs Eleanor
Wigley, Rt Hon Dafydd


Lait, Mrs Jacqui
Wilkinson, John


Lansley, Andrew
Willetts, David


Leigh, Edward
Willis, Phil


Letwin, Oliver
Wilshire, David


Lidington, David
Winterton, Nicholas (Macclesfield)


Lilley, Rt Hon Peter
Yeo, Tim


Lloyd, Rt Hon Sir Peter (Fareham)
Young, Rt Hon Sir George


Lyell, Rt Hon Sir Nicholas



MacGregor, Rt Hon John
Tellers for the Noes:


McIntosh, Miss Anne
Mr. Peter Luff and


MacKay, Rt Hon Andrew
Mr. Peter Atkinson.

Question accordingly agreed to.

Lords amendment disagreed to.

Mr. Nigel Waterson: On a point of order, Mr. Deputy Speaker. As you may be aware, the Government were heavily defeated yet again in the Lords


this evening on section 28. Has a Minister requested permission to make an urgent statement to the House this evening, as would be entirely right and proper, on whether the Government intend to abandon this ill-thought-out provision so that the rest of the Bill can have a fair passage?

Mr. Deputy Speaker (Mr. Michael J. Martin): That has nothing to do with the Chair.

Lords amendments No. 6 and 7 disagreed to.

Government amendments (a) and (b) in lieu of Lords amendments Nos. 6 and 7 agreed to.

Lords amendment No. 8 disagreed to.

Lords amendments Nos. 9 and 10 agreed to [Special Entry].

Clause 10

OBTAINING INFORMATION

Lords amendment: No. 11, in page 6, line 18, after ("body") insert

("or giving a direction under subsection (5)")

Miss Melanie Johnson: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 12 to 14, 17, 18, 23 and 26.

Miss Johnson: The amendments all relate to provisions regarding the devolved Administrations. Lords amendments Nos. 11, 12, 13, 18, 23 and 26 all relate to the Welsh Assembly. Nos. 11, 12 and 18 introduce requirements for consultation in areas where the Assembly has an interest. No. 13 will allow the Assembly to amend the Government of Wales Act 1998 to introduce resource budgeting. Nos. 23 and 26 amend the Act to bring its accounting provisions in line with the provisions of the Bill. In particular, the amendments will enable the Assembly to prepare whole of government of Wales accounts.
Lords amendment No. 14 is a new clause, providing for the devolved Administrations to invest in Partnerships UK, and No. 17 is a minor change consequent on the new clause.

Mr. Letwin: The Economic Secretary has passed fairly rapidly over the amendments. We do not intend to press the matter to a vote, but the House needs some explanation of the considerable changes that the amendments introduce, the largest and most important of which is the Henry VIII power given to the Secretary of State under Lords amendment No. 13. The amendment says:
If it appears to the Secretary of State to be expedient in consequence of any of the matters specified in subsection (2), he may by order amend, repeal or make provision similar to any of the following provisions of the Government of Wales Act.
Time was when Henry VIII provisions allowing the repeal or alteration of Government-inspired primary legislation were unheard of. Then, sadly—I admit the joint responsibility of Governments of all parties—the phenomenon became known. Then we descended to the level at which it was so much known that it was

almost frequent. Then, under the aegis of the present Government, with their overwhelming control of the House, that which was frequent began to become regular.
Many of us inveighed against that and made a practice of drawing the attention of the House to each and every Henry VIII provision that was introduced. At least even then, until tonight, when such provisions were made, a careful explanation was given. Here, I fear that we face the final nadir, with Parliament being superseded by what is virtually Executive action—an order—and the Economic Secretary not even making a nod towards the fact. I do not accuse her of any especial malfeasance, as she is merely following the trend of her ministerial colleagues in getting to the point at which the making and unmaking of primary legislation by administrative order is regarded as a matter of such course that it hardly need be mentioned.
That should never be a matter of course, however, and it cannot be regarded as such, especially on a night when the Government have used their overwhelming majority to attempt to overturn the Lords in their defence of Parliament. What an irony that, on such a night, following such a vote, the Economic Secretary should not even bother to bring to the attention of those few hon. Members remaining in the House that what they are about to accept—may the Lord make us truly thankful—is a Lords amendment under which Parliament is to be superseded by an administrative order. I hope at least that I have said enough to taunt the Economic Secretary into giving some explanation of why it needs to be done in that way.
I return to the other elements of the amendments. Amendment No. 12 is interesting, not least because it says that
(a) the Treasury shall consult the National Assembly for Wales and the Auditor General for Wales before making an order in respect of the body.
We see another example of the Treasury acting after mere consultation. I wonder whether the Economic Secretary could tell the House why it is that the Treasury is left with the discretion in the amendment in the first place. I assume she believes devolution to be an important step, so why does not the National Assembly for Wales and the Auditor General for Wales have the right or the power positively to prevent the Treasury from making an order if they do not regard that order as in any way appropriate?
We are dealing with the intersection of complex UK legislation, which is designed primarily for England and Wales, with the devolution process. Many people in the House of Commons and in the other place have a great interest in that intersection. We would like some explanation of whether the Economic Secretary believes that we have now reached the end of the road and finally clarified the relationship between the Treasury and the Assembly and its organs, or whether we will see a further chain of needed amendments and changes to capture that relationship in its proper form.
The Auditor General for Wales is after all a new creature, who was created by a Bill in which it was discovered inter alia that, in its original draft, the National Assembly for Wales (Transfer of Functions) Order 1999, under which the Secretary of State transferred his powers to the National Assembly for Wales, transferred power over the Brompton cemetery in London to the National Assembly. That was the care with which that order was originally designed. That is no reflection on the


extraordinary labours of those who put together—[Interruption.] I do not jest. My hon. Friends question my sanity in raising that issue, but I am not jesting. I am telling the literal truth. A reference to Hansard for the debates that concerned the Government of Wales Bill will show that.
The fact is that the officials who laboured mightily to produce the relevant legislation, the devolution legislation, were operating under time constraints which made even the time constraints under which those who produced the Government Resources and Accounts Bill worked seem leisurely. Therefore, it was no surprise that grave mistakes were made. [Interruption.] My hon. Friend the Member for Arundel and South Downs (Mr. Flight) regards my categorisation of the Brompton cemetery as a grave mistake in itself, but I assure him that it was an entirely unintentional pun, which until his lightning eye ascended on it had escaped me. The mistakes that were made were graver than the grave. They concerned the whole structure of that lamentable piece of legislation.
The serious point in the context of this Bill is that we do not know what the real position of the Auditor General for Wales will be and how that Auditor General will relate to the CAG and to the NAO, and hence to this Parliament and to that Parliament. I trust that the Economic Secretary will give us a full explanation of how she sees those relationships being articulated following the undoubted acceptance of the Lords amendment and whether, as I say, having accepted the amendment, we have genuinely reached the end of a rather tortuous road in constructing that financial relationship.

Mr. Dafydd Wigley: I am not quite sure whether I should declare an interest as a member of the Audit Committee in the National Assembly. In case I need to, I do so.
I am glad on this occasion to rise in support of the Government, although obviously the measure does not go as far as I would want to in this matter, as in so many others. I assure those on the Conservative Front Bench that it is a process, not an event. The process no doubt will go on. I point out to them only that, in the context of these amendments, I have no doubt that their colleagues, the Conservative party of Wales, as it now calls itself, will support the provisions. I am sure that that will be an indicator of the growing divergence between the two parties.

Mr. Letwin: The right hon. Gentleman's presence on the Audit Committee gives us some cause for confidence. Let me add that one reason why we shall not oppose the amendment is that we understand that our colleagues in the Welsh Assembly support it.

Mr. Wigley: I am glad to hear it. I believe that the hon. Gentleman's colleagues in the Assembly no longer regard the father Act as lamentable either; but perhaps we should not pursue that.
The hon. Gentleman said that the Auditor General for Wales was a new creature. Sir John Bourne is not a new creature, although he may be experiencing a new

incarnation—an incarnation that he is rather enjoying. To his surprise, he secured not a fraction of the budget for which he had asked, not almost the whole of it, but the entirety. I do not think that he has ever received such a welcome as the welcome he received when he took his role in the Assembly.
The audit function in the Assembly has got off to a very good start, which I think justifies the transfer of powers that we are discussing.

Mr. Letwin: Does the right hon. Gentleman agree that the relationship between a person in one incarnation and a person in another, whether or not they are two creatures, has proved problematic in a number of instances—not least in the case of the utility regulators? Does he also agree that it may well prove difficult for the CAG to reoccur, so to speak, as the Auditor General for Wales without some conflict arising between the two roles?

Mr. Wigley: Theoretically that is a possibility, but I think that the advantages of having Sir John Bourne in the job for an initial period far outweigh the disadvantages, and that we have got off to a good start—largely through drawing on Sir John's experience and that of his staff.
People who have appeared before the Audit Committee—for example, to give evidence about the National Museum for Wales—have said that they never want to be put in the same position again. That is a good omen, because it means that people will sort things out themselves rather than having to be whistled up. Whatever may have happened in Wales in the past, there are indications that we shall run a tight ship in future.
The hon. Member for West Dorset (Mr. Letwin) mentioned the Henry VIII aspects of Lords amendment No. 13. In fact, the Henry VIII powers—for which the Government of Wales Act 1998 provides precedents—are not given to the Welsh Assembly. The orders would come from the Secretary of State, and the powers can be used only when
a draft has been laid before, and approved by resolution of, each House of Parliament.
It is clear that the slippery slope to devolution is not severely compromised by this small concession.
Orders relating to sections 85 and 86 of the 1998 Act must be approved by the Assembly. That is right and proper, because such orders would concern devolved matters.
There has been all-party agreement in the Assembly and with Edwina Hart, the Finance Secretary, on the programme that we are to follow. That, too, is right and proper.
I want to ask the Minister one or two questions. The first relates to the change in the timetable, and the establishment of a 30 November deadline. Although that allows for another couple of months, it may still be a tight deadline.
What would happen if accounts relating to the government of Wales turned out to be qualified accounts? I assume that such qualification is an option; if it is, what consequences would there be?
I wonder whether the proposed new provision is flexible enough. New bodies are coming into existence in Wales as a consequence of devolution. I hope we would


not need to resort to primary legislation if we needed to amend them along the lines of what is suggested in proposed new section 18C of the 1998 Act.
As I said, the audit function is vital to the National Assembly, and it needs to be open, transparent and respected across Wales. I believe that the powers that are being transferred will be helpful in achieving that end. For that reason, I shall support Lords amendment No. 11.

Miss Melanie Johnson: Lords amendment No. 13 substitutes a new clause 15 and, as the right hon. Member for Caernarfon (Mr. Wigley) has just said, empowers the Secretary of State—in practice, my right hon. Friend the Secretary of State for Wales—to make changes to sections 81, 85 and 86 of the Government of Wales Act 1998 in consequence of the United Kingdom Government's budget and accounts changing from a cash basis to a resource basis. The intention is that the National Assembly's budget and accounts will move at the same time to a resource basis.
The power will enable the Secretary of State to make appropriate changes to those provisions in the 1998 Act to ensure that the National Assembly's budgetary processes can be changed to a resource basis. As the right hon. Member for Caernarfon said, the power is exercisable by order and will be made by a statutory instrument. Before the Secretary of State can exercise that power, he will have to consult the National Assembly in so far as he is changing section 81, which provides for the Secretary of State to make to the Assembly a statement of his estimated payments for each financial year.
As the right hon. Member for Caernarfon also said, the Secretary of State will then be required to obtain the Assembly's agreement before he can change sections 85 and 86. Those sections deal retrospectively with expenditure by the National Assembly and its statement of proposed expenditure for each financial year.
Additionally, and to ensure that proper parliamentary scrutiny of that power is maintained, the Secretary of State will be required to lay a draft of any order before both Houses of Parliament for their approval. In our view, it is a necessary power. Its limits have been clearly defined, and it is subject to a high degree of parliamentary scrutiny and National Assembly involvement, as is right and proper.

Mr. Letwin: The Economic Secretary said that the process will be subject to a high degree of parliamentary scrutiny. Will she therefore guarantee to the House that time will be found by the Leader of the House for a proper debate—shall we say three hours—of resolutions of that variety, so that there is a genuine high degree of parliamentary scrutiny on the Floor of the House? Or does the Economic Secretary simply mean that such resolutions will go through the normal process, on the nod, with 90 minutes in Committee?

Miss Johnson: They will go through the normal processes. As I understand normal processes, they occur mostly in Committee. I am distressed to hear that the hon. Gentleman thinks that that is such a trivial form of scrutiny, particularly as he spends so much time in

Committee scrutinising various matters. I cannot believe that he really subscribes to the view that such scrutiny is a meaningless part of the parliamentary process.

Mr. Letwin: The Economic Secretary is being very courteous in giving way. Is she seriously seeking to persuade the House that the phrase "a high degree of parliamentary scrutiny" is satisfied by cursory examination of such matters, very often with barely anyone present who understands the history of the matter or cares much about the outcome? Does she realise that, whatever the high-flown phrases, that is the reality? Cannot she recognise that some of us are concerned about changing primary legislation by those means when we have so carefully established the system that we have used with this Bill, which goes from Second Reading to consideration of Lords Amendments? Is not that system worth replicating when we are changing the law?

Miss Johnson: I have never found the hon. Gentleman taking any of these matters trivially when he deals with them in Committee. In the past year, I have attended and participated in various debates on similar matters. I have always found that, when it was a matter of some significance, hon. Members took their responsibilities very seriously and pursued their interests very vigorously, albeit the process occurred in Committee rather than on the Floor of the House. I am sure that they will do so in connection with this provision.
I have already set out the safeguards that exist, which involve discussions with the National Assembly. The agreement of the Assembly at key points is an additional factor, as it clearly has a direct interest in these matters.
The amendment on consultation was tabled with the agreement of the National Assembly of Wales and the Auditor General. They were satisfied with it, and the Bill sets out the relationship between the Treasury and the Assembly on accounting matters only.
The hon. Member for West Dorset asked about the role of the Auditor General for Wales. The right hon. Member for Caernarfon gave a thorough answer to that question in his speech. The role of the Auditor General for Wales is set out in the Government of Wales Act 1998. I was delighted to hear about the support that the Welsh Assembly has given to the work of the Auditor General for Wales, and about the way in which it is conducting its affairs.
The right hon. Member for Caernarfon asked about the revised timetable for the accounts, which is agreed by the National Assembly and the Auditor General for Wales. I can tell the right hon. Gentleman that the Assembly's accounts could be qualified by the Auditor General for Wales, and it would be for the Assembly to decide what consequences should flow from the qualification.
The right hon. Member for Caernarfon asked whether the new bodies would also be covered. I do not have an answer to hand, but I shall certainly write to the right hon. Gentleman.

Lords amendment agreed to [Special Entry].

Lords amendments Nos. 12 to 15 agreed to [Special Entry].

Clause 27

AMENDMENTS AND REPEALS

Lords amendment: No. 16, in page 13, line 1, leave out from ("2") to second ("are") in line 2

Miss Melanie Johnson: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 19, 20 to 22, 24 and 25.

Miss Johnson: These are technical and drafting amendments. Unless an hon. Member has a question, I shall say no more about them.

Mr. Letwin: I regret to say that I have a question. Amendment No. 19 in this group mentions "unstamped vouchers" in connection with section 37 of the Exchequer and Audit Departments Act 1866, and states that they
shall cease to have effect.
I do not understand. A brief look at the relevant statute did not clarify matters. Will the Minister explain?

Miss Johnson: Amendments Nos. 16 and 19 belong together. Section 37 of the 1866 Act is utterly obsolete. It has been included in the list of repeals in schedule 2 since the first draft of the Bill. However, uniquely among the provisions repealed by the Bill, the repeal of this provision was not, prior to the amendments, formally set out elsewhere in the Bill. Instead, reliance was placed on a phrase in clause 27 that the repeals included
enactments that are no longer of practical utility.
It was decided that for the sake of consistency, section 37 of the 1866 Act should be repealed explicitly, and that is done by amendment No. 19. That means that the phrase in clause 27 about enactments that are no longer of practical utility becomes redundant, as no repeals in the Bill are now dependent on it. It can therefore be deleted, which is done by amendment No. 16.

BUSINESS OF THE HOUSE

Motion made, and Question proposed,

That, at this day's sitting, the Child Support, Pensions and Social Security Bill and the Government Resources and Accounts Bill may be proceeded with, though opposed, until any hour.—[Mr. Allen.]

Question put:—

The House divided: Ayes 296, Noes 104.

Division No. 283]
[10 pm

AYES


Abbott, Ms Diane
Bayley, Hugh


Adams, Mrs Irene (Paisley N)
Beard, Nigel


Ainger, Nick
Beckett, Rt Hon Mrs Margaret


Ainsworth, Robert (Cov'try NE)
Begg, Miss Anne


Alexander, Douglas
Bell, Stuart (Middlesbrough)


Allen, Graham
Benn, Hilary (Leeds C)


Anderson, Donald (Swansea E)
Benton, Joe


Anderson, Janet (Rossendale)
Bermingham, Gerald


Atherton, Ms Candy
Best, Harold


Atkins, Charlotte
Betts, Clive


Austin, John
Blears, Ms Hazel


Banks, Tony
Blizzard, Bob


Barnes, Harry
Borrow, David


Barron, Kevin
Bradley, Keith (Withington)





Bradley, Peter (The Wrekin)
Foster, Michael J (Worcester)


Bradshaw, Ben
Fyfe, Maria


Brinton, Mrs Helen
Gardiner, Barry


Brown, Rt Hon Nick (Newcastle E)
George, Bruce (Walsall S)


Brown, Russell (Dumfries)
Gerrard, Neil


Burden, Richard
Godman, Dr Norman A


Burgon, Colin
Godsiff, Roger


Butler, Mrs Christine
Goggins, Paul


Caborn, Rt Hon Richard
Golding, Mrs Llin


Campbell, Mrs Anne (C'bridge)
Gordon, Mrs Eileen


Campbell-Savours, Dale
Griffiths, Jane (Reading E)


Cann, Jamie
Griffiths, Win (Bridgend)


Caplin, Ivor
Grocott, Bruce


Casale, Roger
Hain, Peter


Caton, Martin
Hall, Mike (Weaver Vale)


Cawsey, Ian
Hall, Patrick (Bedford)


Chapman, Ben (Wirral S)
Hamilton, Fabian (Leeds NE)


Chaytor, David
Hanson, David


Chisholm, Malcolm
Heal, Mrs Sylvia


Clapham, Michael
Healey, John


Clark, Rt Hon Dr David (S Shields)
Hepburn, Stephen


Clark, Paul (Gillingham)
Heppell, John


Clarke, Charles (Norwich S)
Hesford, Stephen


Clarke, Eric (Midlothian)
Hill, Keith


Clarke, Rt Hon Tom (Coatbridge)
Hinchliffe, David


Clarke, Tony (Northampton S)
Home Robertson, John


Clelland, David
Hope, Phil


Clwyd, Ann
Hopkins, Kelvin


Coaker, Vernon
Howarth, Alan (Newport E)


Coffey, Ms Ann
Howarth, George (Knowsley N)


Cohen, Harry
Howells, Dr Kim


Connarty, Michael
Hoyle, Lindsay


Cook, Frank (Stockton N)
Hughes, Ms Beverley (Stretford)


Cooper, Yvette
Hughes, Kevin (Doncaster N)


Corbett, Robin
Humble, Mrs Joan


Corbyn, Jeremy
Hurst, Alan


Corston, Jean
Iddon, Dr Brian


Cox, Tom
Illsley, Eric


Cranston, Ross
Jamieson, David


Crausby, David
Jenkins, Brian


Cryer, Mrs Ann (Keighley)
Johnson, Alan (Hull W & Hessle)


Cryer, John (Hornchurch)
Johnson, Miss Melanie(Welwyn Hatfield)


Cummings, John



Cunningham, Jim (Cov'try S)
Jones, Rt Hon Barry (Alyn)


Curtis-Thomas, Mrs Claire
Jones, Mrs Fiona (Newark)


Dalyell, Tam
Jones, Helen (Warrington N)


Darling, Rt Hon Alistair
Jones, Ms Jenny(Wolverh'ton SW)


Darvill, Keith



Davey, Valerie (Bristol W)
Jones, Jon Owen (Cardiff C)


Davies, Rt Hon Denzil (Llanelli)
Jones, Dr Lynne (Selly Oak)


Davies, Geraint (Croydon C)
Jones, Martyn (Clwyd S)


Davis, Rt Hon Terry(B'ham Hodge H)
Keeble, Ms Sally



Keen, Alan (Feltham & Heston)


Dawson, Hilton
Keen, Ann (Brentford & Isleworth)


Dean, Mrs Janet
Kennedy, Jane (Wavertree)


Denham, John
Khabra, Piara S


Dismore, Andrew
Kidney, David


Dobbin, Jim
Kilfoyle, Peter


Dobson, Rt Hon Frank
Kumar, Dr Ashok


Donohoe, Brian H
Ladyman, Dr Stephen


Doran, Frank
Lawrence, Mrs Jackie


Dowd, Jim
Laxton, Bob


Drew, David
Lepper, David


Eagle, Angela (Wallasey)
Leslie, Christopher


Eagle, Maria (L'pool Garston)
Levitt, Tom


Edwards, Huw
Lewis, Ivan (Bury S)


Efford, Clive
Lewis, Terry (Worsley)


Ellman, Mrs Louise
Lloyd, Tony (Manchester C)


Ennis, Jeff
Lock, David


Fisher, Mark
Love, Andrew


Fitzpatrick, Jim
McAllion, John


Fitzsimons, Mrs Lorna
McAvoy, Thomas


Flint, Caroline
McCabe, Steve


Flynn, Paul
McCafferty, Ms Chris


Foster, Rt Hon Derek
McCartney, Rt Hon Ian(Makerfield)


Foster, Michael Jabez (Hastings)







McDonagh, Siobhain
Ross, Ernie (Dundee W)


Macdonald, Calum
Roy, Frank


McDonnell, John
Ruane, Chris


McGuire, Mrs Anne
Ruddock, Joan


McIsaac, Shona
Russell, Ms Christine (Chester)


McKenna, Mrs Rosemary
Ryan, Ms Joan


McNamara, Kevin
Salter, Martin


MacShane, Denis
Sarwar, Mohammad


Mactaggart, Fiona
Savidge, Malcolm


McWalter, Tony
Sedgemore, Brian


McWilliam, John
Sheerman, Barry


Mahon, Mrs Alice
Short, Rt Hon Clare


Mallaber, Judy
Simpson, Alan (Nottingham S)


Marsden, Gordon (Blackpool S)
Skinner, Dennis


Marshall, David (Shettleston)
Smith, Rt Hon Andrew (Oxford E)


Marshall, Jim (Leicester S)
Smith, Angela (Basildon)


Marshall-Andrews, Robert
Smith, Miss Geraldine(Morecambe & Lunesdale)


Maxton, John



Meacher, Rt Hon Michael
Smith, Jacqui (Redditch)


Meale, Alan
Smith, John (Glamorgan)


Merron, Gillian
Southworth, Ms Helen


Michael, Rt Hon Alun
Squire, Ms Rachel


Michie, Bill (Shef'ld Heeley)
Starkey, Dr Phyllis


Miller, Andrew
Steinberg, Gerry


Mitchell, Austin
Stevenson, George


Moffatt, Laura
Stewart, David (Inverness E)


Moonie, Dr Lewis
Stewart, Ian (Eccles)


Morgan, Ms Julie (Cardiff N)
Stoate, Dr Howard


Morley, Elliot
Strang, Rt Hon Dr Gavin


Morris, Rt Hon Ms Estelle(B'ham Yardley)
Stringer, Graham



Stuart, Ms Gisela


Mountford, Kali
Taylor, Rt Hon Mrs Ann (Dewsbury)


Mudie, George



Mullin, Chris
Taylor, David (NW Leics)


Murphy, Jim (Eastwood)
Temple-Morris, Peter


Naysmith, Dr Doug
Thomas, Gareth R (Harrow W)


Norris, Dan
Timms, Stephen


O'Brien, Bill (Normanton)
Tipping, Paddy



Todd, Mark


O'Hara, Eddie
Truswell, Paul


Olner, Bill
Turner, Dennis (Wolverh'ton SE)


Osborne, Ms Sandra
Turner, Neil (Wigan)


Perham, Ms Linda
Twigg, Stephen (Enfield)


Pickthall, Colin
Tynan, Bill


Plaskitt, James
Vis, Dr Rudi


Pollard, Kerry
Walley, Ms Joan


Pond, Chris
Ward, Ms Claire


Pound, Stephen
Wareing, Robert N


Powell, Sir Raymond
Watts, David


Prentice, Ms Bridget (Lewisham E)
Whitehead, Dr Alan


Prentice, Gordon (Pendle)
Wicks, Malcolm


Prescott, Rt Hon John
Williams, Alan W (E Carmarthen)


Primarolo, Dawn
Williams, Mrs Betty (Conwy)


Prosser, Gwyn
Wills, Michael


Purchase, Ken
Winnick, David


Quin, Rt Hon Ms Joyce
Winterton, Ms Rosie (Doncaster C)


Quinn, Lawrie
Woolas, Phil


Radice, Rt Hon Giles
Worthington, Tony


Rammell, Bill
Wray, James


Rapson, Syd
Wyatt, Derek


Raynsford, Nick



Reed, Andrew (Loughborough)
Tellers for the Ayes:


Reid, Rt Hon Dr John (Hamilton N)
Mr. Don Touhig and


Roche, Mrs Barbara
Mr. Tony McNulty.



NOES


Allan, Richard
Brand, Dr Peter


Amess, David
Brazier, Julian


Arbuthnot, Rt Hon James
Brooke, Rt Hon Peter


Baldry, Tony
Bruce, Ian (S Dorset)


Ballard, Jackie
Burnett, John


Beith, Rt Hon A J
Burns, Simon


Blunt, Crispin
Chapman, Sir Sydney (Chipping Barnet)


Boswell, Tim



Bottomley, Peter (Worthing W)
Clappison, James


Bottomley, Rt Hon Mrs Virginia
Collins, Tim





Cormack, Sir Patrick
MacKay, Rt Hon Andrew


Cotter, Brian
Maclean, Rt Hon David


Davey, Edward (Kingston)
McLoughlin, Patrick


Davies, Quentin (Grantham)
Madel, Sir David


Davis, Rt Hon David (Haltemprice)
Maude, Rt Hon Francis


Ewing, Mrs Margaret
Mawhinney, Rt Hon Sir Brian


Fabricant, Michael
Moss, Malcolm


Fearn, Ronnie
O'Brien, Stephen (Eddisbury)


Flight, Howard
Öpik, Lembit


Foster, Don (Bath)
Ottaway, Richard


Fowler, Rt Hon Sir Norman
Paterson, Owen


Fraser, Christopher
Portillo, Rt Hon Michael


Garnier, Edward
Prior, David


George, Andrew (St Ives)
Redwood, Rt Hon John


Gibb, Nick
Rendel, David


Gillen, Mrs Cheryl
Robathan, Andrew


Gorman, Mrs Teresa
Robertson, Laurence


Gray, James
Ruffley, David


Green, Damian
Russell, Bob (Colchester)


Greenway, John
St Aubyn, Nick


Grieve, Dominic
Sayeed, Jonathan


Gummer, Rt Hon John
Simpson, Keith (Mid-Norfolk)


Hague, Rt Hon William
Smith, Sir Robert (W Ab'd'ns)


Hammond, Philip
Spelman, Mrs Caroline


Harris, Dr Evan
Spicer, Sir Michael


Hayes, John
Stanley, Rt Hon Sir John


Heald, Oliver
Syms, Robert



Taylor, Ian (Esher & Walton)


Heathcoat-Amory, Rt Hon David
Thomas, Simon (Ceredigion)


Horam, John
Tredinnick, David


Howarth, Gerald (Aldershot)
Tyler, Paul


Hughes, Simon (Southwark N)
Viggers, Peter


Jackson, Robert (Wantage)
Wells, Bowen


Kirkbride, Miss Julie
Whittingdale, John


Kirkwood, Archy
Widdecombe, Rt Hon Miss Ann


Laing, Mrs Eleanor
Wigley, Rt Hon Dafydd


Lait, Mrs Jacqui
Wilkinson, John


Lansley, Andrew
Willetts, David


Leigh, Edward
Willis, Phil


Letwin, Oliver
Wilshire, David


Lidington, David
Young, Rt Hon Sir George


Lilley, Rt Hon Peter



Lloyd, Rt Hon Sir Peter (Fareham)
Tellers for the Noes:


Lyell, Rt Hon Sir Nicholas
Mr. Peter Luff and


McIntosh, Miss Anne
Mr. Andrew Stunell.

Question accordingly agreed to.

Mr. Edward Garnier: On a point of order, Mr. Deputy Speaker. It has just come to the attention of some of us that the Government have snuck on to the Order Book for tomorrow a guillotine motion for the Criminal Justice (Mode of Trial) (No. 2) Bill. This is the 36th time in the course of the Prime Minister's premiership that the Government have sought to curtail debate—and not just on any old Bill, but on a Bill of huge constitutional importance.
The Government business managers have clearly become alarmed by the return of their out-of-touch Prime Minister from his £500 million jaunt to Japan. The motion demonstrates the arrogance and ineptitude of this appalling Government. Where is the Minister prepared to stand up for the interests of the British citizen rather than the ill- considered meanderings of this exhausted Administration?
When a Government overreach themselves, they attempt to suborn Parliament. Tyranny begins when they attempt to suborn the jury system. Can it be right that this appalling bunch of inept politicians seeks to destroy the


rights of the British citizen and to do so by a suppressed and curtailed debate tomorrow? Five hours for a Bill of huge constitutional importance—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. What I am hearing so far from the hon. and learned Gentleman sounds suspiciously like a speech on a guillotine motion. What is the point of order for the Chair?

Mr. Garnier: The point of order ought to be clear not only to you, Mr. Deputy Speaker, but to all the Labour Members here. Is it in order for this appalling bunch of constitutional hooligans to demonstrate its total disregard for the rights of this House and the rights of citizens by, for the 36th time, curtailing debate on a Bill of huge constitutional importance?
The first attempt at this Bill was defeated in another place, after it was mauled in this House. Is it right that the Government should attempt to have another go by curtailing debate in this House? I urge you to stand up for the rights of the House, Mr. Deputy Speaker, and the citizens whom we represent.

Mr. Deputy Speaker: I think that the hon. and learned Gentleman must know that the Chair has no responsibility whatsoever for the business that is put before the House, and it is not anything on which the Chair can rule. The hon. and learned Gentleman has had his say and, no doubt, what he has said will be on the record and heard by members of the Government.

Mr. Paul Tyler: Further to that point of order, Mr. Deputy Speaker. We share the concerns that have been expressed, but in far more temperate terms. Of course, I accept your ruling that you have no responsibility for the business put before the House, Mr. Deputy Speaker. However, may I put it to you that it is the Chair's function to protect the rights of Back Bench Members and all parties in the House?
I am sure, Mr. Deputy Speaker, that you appreciate fully that the way in which the Government are handling the business this week is not in the interests of good scrutiny of legislation. In particular, the lack of proper consultation on the timetable motion for tomorrow is an affront to an extremely important piece of legislation that requires careful scrutiny. Even if you cannot rule on the business of the House, Mr. Deputy Speaker, you can at least ensure that proper representations are made to the Government on the way in which they have handled this week's business.

Mr. Deputy Speaker: I hope that I can reply in equally moderate terms to the hon. Gentleman. I have allowed the point of order to be somewhat extended so that concerns expressed by both Opposition parties can be fully heard, as they have been. However, the fact remains that what is put on the Order Paper is a matter for the Government. not the Chair.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. I cannot rule on anything further. The plain fact is that the business of the House is not determined by the Chair, and I cannot go on entertaining extended points of order on the same point.

Sir Nicholas Lyell: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I have ruled on the point of order, and I cannot take any more points on the narrow matter before me. Unless there is an entirely fresh point of order, I cannot rule upon it—[Interruption.] Order. We must conduct ourselves in an orderly manner and I must at least hear what is being put to me by the right hon. and learned Gentleman.

Sir Nicholas Lyell: The Bill has to move on to another place. It came out of its Committee as long ago as 6 June, which was more than six weeks ago. In the meantime, there have been many evenings when the House could have conducted proper debate on the matter. However, the Bill was not brought before the House and is now to be guillotined. It is rumoured that when it is pushed through the other place the Parliament Acts are to be used, which would be tyranny. Is not keeping these matters under control within the House's rules of order?

Mr. Deputy Speaker: Order. It may be a matter for right hon. and hon. Members to argue these matters in an orderly way before the House. However, it cannot be taken further on a point of order this evening. There is nothing on which the Chair can rule, and I cannot hear more on that particular matter. I have allowed considerable rein for argument to intrude on a point of order so that both Opposition parties have had an opportunity to have their say on the matter, so I cannot take any more points of order on it.

Mr. Peter Bottomley: rose—

Mr. Deputy Speaker: I hope that this is genuinely a different point of order.

Mr. Bottomley: On a different point of order, Mr. Deputy Speaker. I will not mention the Bill that has been discussed. Is it the convention of the House that the Leader of the House makes a business statement in advance so that those Members who are not here now may know what tomorrow's business is? Could the Leader be called to the House to make that statement now? She had notice of her action; she should be here now making a statement about tomorrow's business.

Mr. Deputy Speaker: It is always helpful if the Leader of the House is able to make such a statement, but that rule is certainly not observed on every occasion. We must move on.

Mr. Edward Leigh: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: I hope that this is a different point of order.

Mr. Leigh: This point is completely within your responsibility, Mr. Deputy Speaker, because it regards the


choice of speakers in tomorrow's debate. If, as we presume, the debate on the guillotine motion lasts for three hours, we will be left with an hour and three quarters to discuss the Bill. We will have an hour and three quarters to discuss legislation that will end a practice that has been prevalent in our country for seven centuries—I make that 15 minutes per century. [HON. MEMBERS: "That is new Labour."] That sums up new Labour. How will you divide up the time, Mr. Deputy Speaker, so that we get adequate debate with only 15 minutes for each century of tradition?

Mr. Deputy Speaker: I am sure that the hon. Gentleman knows that the Chair cannot speculate on who will be called when at this stage the Chair does not even know who will apply to speak in the debate.

Government Resources and Accounts Bill

Lords amendments again considered.

Question again proposed, That the House agrees with the Lords in their amendment No. 16.

Miss Melanie Johnson: The hon. Member for West Dorset (Mr. Letwin) is no longer in his place, but he asked me a question about section 37 of the 1866 Act. The original meaning of that section is so obscure that neither the Treasury nor National Audit Office officials who have examined it have been able to decipher it. The main point is that it concerns an old-fashioned practice that is no longer used by the NAO, which has not objected to the repeal of the provision. I hope that the amendment will be agreed to.
Lords amendment agreed to.
Remaining Lords amendments agreed to [Some with Special Entry].
Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill; Mr. Graham Allen, Mr. John Healey, Miss Melanie Johnson, Mr. Oliver Letwin and Mr. Keith Simpson; Miss Melanie Johnson to be the Chairman of the Committee; Three to be the quorum of the Committee.—[Mr. Allen.]

To withdraw immediately.

Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

Brand Names

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]

Mr. Austin Mitchell: I must express my pleasure at being able to address this enthusiastic and crowded House on the important issue of brands. That subject is much neglected, but brands are very important to the British economy. They account for £50 billion of gross production, and 400, 000 jobs depend on them.
Brands are even more important to Grimsby, which is now designated Europe's food town. It has the biggest concentration of food production and cold storage in Europe, and we are home to household names such as Captain Birds Eye, Bluecrest, Youngs Seafood—masters of the sea—and Baxters soups, with all their wonderful and delicious brands. We are the home of Lean Cuisine, Linda McCartney's menu and Harry Ramsden's batter on Ross Seafood. What is more, we have branded Grimsby fish, because fish sold in Grimsby traditionally has a quality that is very different from that of fish sold in other ports across the estuary, which shall remain nameless. Brands are extremely important, especially in the food industry. Other local brands include McCain oven-ready chips further up the coast and KitKat in York.
Brands are important to a range of consumer products and, therefore, to business competitiveness and competition. They encourage and sustain innovation, because companies are willing to invest if that investment will be protected by a brand name. Brands allow continuous improvement of products, because businesses want to maintain their bond with the consumer. Brands are about trust: the consumer comes to trust a brand that is advertised and promoted and an identity builds up between the two.
Brands both protect innovation and act as a catalyst for it. A 1998 study showed that branded businesses in the consumer products sector innovate twice as much as those that have no brands; they spend more on research and development as a percentage of sales to stimulate and develop the brand; and they extract more value from innovation in branded products. Brands are associated with market growth and profits. As shown by the market strategy report of 1998, brands provide an assurance to the consumer and a guarantee of investment.
Brands form an essential part of the modern business practice of reputation management: a business depends on its brands for its reputation. Anything that undermines a brand—for example, copycat products—undermines a company's investment, leeches off the innovation of the brand owner and weakens its competitive position. Brands are crucial to the operation of a modern economy. They are essential to advertising, which encourages demand, which boosts production, which leads to economies of scale, which reduces the price of the product and encourages and protects investment. Brands are an essential element of a competitive economy.
However, unlike patents and trademarks, brands confer inadequate protection on the investment and expertise, and on the bond with the consumer that they help to build. That protection is especially inadequate in this country compared with other European countries. To protect itself and to pursue competitors and producers of copycat

products, a business has to act under the law of tort, using passing-off law dating from the 18th and 19th centuries. That law is vague and the standards of proof are perversely high. The company attempting to protect its brand has to persuade a consumer to say, "I, the consumer, am daft. In my simple-minded way, I was deceived by product Y, which I took to be brand X, and bought it by mistake." It is difficult to persuade consumers to come forward and criticise themselves.
Therefore, to protect brands under the law of tort by attacking the competitor on the grounds that it is passing-off a product as a branded product is an expensive and unsatisfying exercise that offers little prospect of success. That is why so few actions are brought. There have been some conflicts, such as between Ireland's Dunn supermarket with its St. Bernard brand and Marks & Spencer with its St. Michael brand. There was also an argument over Penguin biscuits and Puffin biscuits, which were Asda's competing version. The argument resulted in a very expensive court battle, at the end of which nothing was effectively decided. Both sides claimed victory. The headlines from Asda said, "Puffins Rule the Roost", whereas United Biscuits said "United Biscuits Wins the Battle". All that happened was that the look-alike product was given publicity.
It is particularly important that we act now to give brands better protection. We should do so, first, because of the globalisation of brands and trade. Brands are now sold on a world market and their reputation internationally is traded on. Indeed, they are traded as commodities. Secondly, better protection is important because of the increasing emphasis on intellectual property, of which brands are a part.
Thirdly, we should act now because of the coming explosion of e-commerce. More and more sales will be made on the internet. Consumers are more at risk when they do not have the opportunity to evaluate the product, and are likely to turn in e-commerce to brands that they know and trust. People want to buy in the established framework of established trust and know what they are getting. For those three reasons, brands are becoming more important and we should act now to protect them.
Action is not being taken; indeed, the matter is being shuffled around. I remember when trademark legislation was agreed by the House in 1994 that there was an attempt to include brands, which in fact are a form of trademark. The then Government said, "No, not in this Bill; the question is one of competition legislation." Yet when the Competition Bill came before the House a couple of years ago, the defenders of brands were told, "No, it is a trademark matter." So, it was dismissed on both counts and the Government had it both ways. Now, the consumer White Paper makes no mention of brands even though they are a basic tool of competition for consumer loyalties. We are therefore missing an opportunity to put the matter right, to put brands on a firmer basis and to give companies weapons to enforce brand reputation and loyalty.
I emphasise that I am not talking about brands on the balance sheet. There is a difference between the Securities and Exchange Commission recommendation that brands cannot be valued, and our own Accounting Standards Board desire for some balance-sheet evaluation. I am not in favour of lumbering the balance sheet with more and more intangibles. I remember that Captain Bob Maxwell had his brands—The Sporting Life, Daily Mirror and


Sunday Mirror—valued by Coopers and Lybrand, which then audited his accounts. It therefore reported on its own figures, which was a deplorable practice.
Nor am I talking about supermarkets' own brands. They are a vital part of competition and would not be threatened by any action to protect brands. Supermarket brands are sold on the reputation of the supermarket—Sainsbury's, Asda or whatever.
Nor, finally, am I talking about parallel imports. Indeed, in some ways, I am in favour of parallel imports. I do not see why the weight of European Union legislation should be invoked to protect high-priced sales of luxury items on the European market from cheaper imports of the same branded product from other markets.
As someone who has something of a sunglasses fetish, I was interested to see how cheaply big-name sunglasses such as Serengeti and Bausch and Lomb can be bought at Wal-Mart for £30, whereas in other shops they are sold for £100 or £80. I look forward to a collapse in the price of the products due to the importing of the same brand. That is a question of the pricing policy of luxury goods manufacturers, but I am not dealing with that.
I do not see why in our economy we should be suckered by high-priced products. I am speaking about protecting well-known brands, especially in mass market goods, where look-alike, copycat products can be a form of exploitation which undermines the quality of the brand and investment in the brand. Brands protect innovation, and their role is especially important for competition. We are obsessed with competition, and perhaps a little too obsessed with price competition.
We should protect brands by putting brand law into a form in which it can be effectively enforced. The Select Committee on Trade and Industry a couple of years ago recommended a voluntary code, but I do not think that that would work. We have been pressed by various international bodies—for example, the agreement on trade-related aspects of intellectual property rights in 1994. Article 10 bis of the Stockholm convention of 1967 stated that countries
are bound to assure…effective protection against unfair competition…The following in particular shall be prohibited:
all acts of such a nature as to create confusion by any means whatever…
That is what copycat brands do.
The World Intellectual Property Organization in Geneva published a model law on brands in 1994, which some countries have already implemented, so brands are better protected in other European countries than in the United Kingdom. We should implement such a law. I hope that in his reply to this brief debate, my hon. Friend the Minister can give us some assurance, first, that the Government recognise the importance of brands, not only in serving the consumer but in stimulating and protecting innovation and competition; secondly, that the Government will act to give firmer protection to brands because of their importance to competitiveness; and thirdly, that the Government will give brand owners a means of redress against the debasement or the copying of their product.
That would enhance consumer confidence and, more important, it would give businesses the confidence to develop brands and invest in them, and to build up branded production, with all that that offers the consumer, as a stimulus to greater competitiveness, both nationally and internationally.

The Minister for Competition and Consumer Affairs (Dr. Kim Howells): I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on bringing the debate to the House tonight. I did not know, and I am not sure whether anyone else in the Chamber knew, that Great Grimsby was the branding capital of the United Kingdom food industry. That is fascinating, but I am not sure that Great Grimsby will remain so, after my hon. Friend described companies such as Tesco, Sainsbury' s and Safeway, whose own products sometimes look a little like branded products, as leeches.

Mr. Mitchell: I did not express myself very well. Many of the supermarkets' own brands are also produced in Grimsby. They are not leeching on the production of the branded products. It is the copycat products that, like leeches, are exploiting the investment in the branded products.

Dr. Howells: I thank my hon. Friend for clarifying that; I am sure that those huge companies will be glad that he did so.
The Government recognise that brands are essential to building consumer confidence, act as a guarantee of quality, and prevent consumers from being confused as to who made the goods and where they come from. Brands are a key factor in promoting trade in the marketplace, and brand owners play a key role.
Brands are important to consumers because, as my hon. Friend said, they help to identify the origin and quality of goods, and their manufacturer. They also help consumers to identify genuine goods.
As my hon. Friend said, fake goods may be of poor quality, defective, or even dangerous or damaging. They offer no guarantees or service agreements. We are greatly involved in educating consumers about the long-term effects of buying fake goods, which affects legitimate industry's ability to invest in the creation and development of new products.
I know that the hon. Member for Montgomeryshire (Mr. Öpik) is worried about the effects of counterfeiters and others who try to sell the unsuspecting public products that can be dangerous, especially pharmaceuticals, household goods and associated products.

Mr. Lembit Öpik: Does the Minister agree that even when the quality of the lookalike products is not terrible, they stifle innovation? A turnover of £50 billion in branded products, and the ability to innovate, will be harmed if people always have to look over their shoulders. Having to compete with lookalike products reduces the opportunity for investment. Those products freeload on the reputation of branded products.

Dr. Howells: The hon. Gentleman put the point well. However, although I have great affection and respect for him, I do not entirely agree with him. Emulating products and their packaging sometimes promotes healthy competition. I am instinctively suspicious of the use of this place to build fortress walls round specific products. I acknowledge that adequate protection must exist and that


adequate returns must be made on the original investment. I do not have much time, but I shall try to explain what I mean, and I hope that the hon. Gentleman will bear with me.
The Government appreciate the damage that intellectual property crime does to legitimate business. We are committed to working to improve matters. Indeed, our legislative programme, which includes specific improvements to the criminal provisions in intellectual property law, the implementation of the e-commerce and, in due course, copyright directives, will help in the fight against counterfeiting and piracy. Other initiatives, such as raising consumer awareness, improving co-operation, and the co-ordination of enforcement effort, are also important. The Government are currently involved in much activity in that context.
My hon. Friend the Member for Great Grimsby and the hon. Member for Montgomeryshire asked why there is insufficient protection against copycat or look-alike products. The Government are not convinced of the need for a change in the law to extend brand owners' rights against those who sell products in so-called look-alike packaging. The Trade Marks Act 1994 introduced several new provisions, which extended trade mark protection to, for example, trade dress, three-dimensional shapes, colours, sounds and smells. The Trade and Industry Committee studied the subject carefully and concluded that brand owners were not using legal remedies such as passing-off. I support those conclusions, and I do not believe that the law is deficient.
We believe that United Kingdom law on intellectual property is compatible with all the international conventions to which we are signatories. They include the World Trade Organisation's trade-related aspects of intellectual property rights agreement, which deals with unfair competition, and incorporates, as my hon. Friend pointed out, article 10 bis. However, I believe that that was an article in the Paris convention.

Mr. Mitchell: Although my hon. Friend says that the power of brand owners to protect themselves exists in legislation, manufacturers do not believe that it is worth the effort. Cases are difficult to prove in law; they are long and tortuous, and the verdicts have not been satisfactory. It is difficult to get people to come forward and say, "I was daft enough to buy this product instead of that one. I was deceived." The burden of proof is the problem.

Dr. Howells: I have to tell my hon. Friend that, as Minister for Competition and Consumer Affairs, which is one of my little titles, I receive scores of letters of complaint about all sorts of things ranging from new and used cars to sunglasses, which he mentioned. However, no constituent has ever written, or been to see me, to complain about being confused by a look-alike product on a supermarket shelf.

Mr. David Taylor: rose—

Dr. Howells: No, I will not give way because we have gone on for long enough on this one.
Indeed, were I to take home an own-brand packet of cornflakes instead of Kellogg's, my kids would throw it out of the window. They are not daft, nor are most consumers daft enough to fall for such a thing. When the British Brands Group lobbied me, as it has done several times, it came up with a ludicrous example: some zappy young executive might charge into a supermarket, mistakenly pull out a bottle of Tesco's look-alike Fairy Liquid instead of the genuine article, and be dreadfully disappointed on arriving home, which would upset her executive evening. I simply do not believe that such things occur. Most consumers are a lot sharper than that; they are capable of making decisions. If companies are not satisfied with the deal that they get from their main retailers—the supermarket chains—let them sue.

Mr. Öpik: Will the Minister give way?

Dr. Howells: For the last time.

Mr. Öpik: I thank the Minister for giving way again, but does he not accept that the problem is serious but less dramatic? Brands innovate and copycats copy the brand image, but not necessarily the brand performance. Over time, expensive innovations are undermined by cheaper copycats, which makes it more difficult for brands to innovate. That harms the whole economy, not just the brands.

Dr. Howells: I agree, but there is a fine line here and a difficult balance to strike. We could talk all night about parallel imports, which my hon. Friend the Member for Great Grimsby mentioned, but would not fencing in the big established brands create hurdles too high for competitors to cross? I acknowledge that I am an unashamed proponent of competition—fierce competition—which brings the best products to the market and provides most benefit to consumers. Having to compete in fierce but fair open markets allows the best companies to evolve. However, as my hon. Friend and the hon. Member for Montgomeryshire said, the rules must be fair. I believe that the rules in this country are fair. I am no more in favour of the balance swinging violently in favour of rights holders than I am of all the controls being removed.

Mr. Taylor: Will my hon. Friend give way?

Dr. Howells: I will, as my hon. Friend has been present since the start of the debate.

Mr. Taylor: Can my hon. Friend confirm whether the Government have a timetable for reviewing the law on branding and the protection that it offers, particularly to firms in my constituency, which contains major distribution warehouses for the goods to which my hon. Friend the Member for Great Grimsby (Mr. Mitchell) referred?

Dr. Howells: My hon. Friend will understand that we all have factories, shops and distribution centres that sell—[Interruption.] Yes, including food shops. We grow some food in Wales, and we process it and sell it. I hope that he realises that I cannot undertake to put legislation


on the statute book. I am not even convinced that things are so askew in this country as to warrant such a review in the first place. However, I give him, my hon. Friend the Member for Great Grimsby and the hon. Member for Montgomeryshire an undertaking that we will continue to keep a sharp eye on this subject. If we do not,

the paradigm of fierce open competition that I described will not occur. A fine balance must be struck. That is the secret of a good economy.

Question put and agreed to.

Adjourned accordingly at ten minutes to Eleven o' clock.